English Auctions with toeholds: An experimental study

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Georganas, Sotiris; Nagel, Rosemarie. English Auctions with toeholds: An experimental study. 2008
To cite or link this document: http://hdl.handle.net/10230/870
dc.contributor.author Georganas, Sotiris
dc.contributor.author Nagel, Rosemarie
dc.contributor.other Universitat Pompeu Fabra. Departament d'Economia i Empresa
dc.date.issued 2008-07-01
dc.identifier.uri http://hdl.handle.net/10230/870
dc.description.abstract We run experiments on English Auctions where the bidders already own a part (toehold) of the good for sale. The theory predicts a very strong effect of even small toeholds, however we find the effects are not so strong in the lab. We explain this by analyzing the flatness of the payoff functions, which leads to relatively costless deviations from the equilibrium strategies. We find that a levels of reasoning model explains the results better than the Nash equilibrium. Moreover, we find that although big toeholds can be effective, the cost to acquire them might be higher than the strategic benefit they bring. Finally our results show that in general the seller?s revenues fall when the playing field is uneven.
dc.language.iso eng
dc.relation.ispartofseries Economics and Business Working Papers Series; 1102
dc.rights L'accés als continguts d'aquest document queda condicionat a l'acceptació de les condicions d'ús establertes per la següent llicència Creative Commons
dc.rights.uri http://creativecommons.org/licenses/by-nc-nd/3.0/es/
dc.title English Auctions with toeholds: An experimental study
dc.type info:eu-repo/semantics/workingPaper
dc.date.modified 2016-06-04T02:51:04Z
dc.subject.keyword Behavioral and Experimental Economics
dc.subject.keyword experiments
dc.subject.keyword toehold auction
dc.subject.keyword takeover
dc.subject.keyword payoff
dc.subject.keyword flatness
dc.subject.keyword quantal response
dc.subject.keyword level-k
dc.subject.keyword leex
dc.rights.accessRights info:eu-repo/semantics/openAccess

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