Entry coordination in auctions and social welfare: An experimental investigation |
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| Authors: | James L. Smith Dan Levin |
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| Affiliation: | (1) Department of Finance, 440 Fincher Building, Southern Methodist University, Dallas, TX 75275-0333 (e-mail: jsmith@mail.cox.smu.edu), US;(2) Department of Economics, Ohio State University, 410 Arps Hall, 1945 North High Street, Columbus, OH 43210-1172, US |
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| Abstract: | Most of the literature on auctions with endogenous entry assumes that, in equilibrium, the number of entrants is deterministic. We discuss a series of experiments designed to test the alternative hypothesis that, even in equilibrium, the number of entrants is stochastic. This distinction has strong implications for auction performance, the design of optimal mechanisms, and social welfare. Our results strongly reject the hypothesis of deterministic entry and tend to confirm the alternative hypothesis that entry is stochastic. Revised February 2000 |
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| Keywords: | : Auctions Entry Experiments Coordination |
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