Job Market Paper:
An Experimental Analysis of Auctions with Uncertain Valuation
Functions and Interdependent Values
Abstract: I study the English auction and the second price auction with
interdependent values in order to determine which auction is
efficient under two settings. First, as a baseline case, I explore
the symmetric case, where all bidders have the same valuation
function, comparing the auctions using data from experiments.
Theoretically, the English auction and the second price auction are
both efficient in the particular symmetric interdependent value case
considered. I find that neither auction is fully efficient all of
the time and that the English auction achieves efficiency with more
frequency. Then I add the possibility that one of the bidders has
two possible valuation functions. Only the bidder himself knows
which valuation function he has in a particular auction. Once this
uncertainty is introduced, theory predicts that the English auction
will more frequently produce the efficient outcome. The experimental
results are consistent with this prediction.
Research Statement (pdf)