Games 2013, 4(4), 608-623; doi:10.3390/g4040608
Article

Bimodal Bidding in Experimental All-Pay Auctions

1 Alumna of the London School of Economics, London WC2A 2AE, UK 2 Walras Pareto Center, University of Lausanne, Lausanne-Dorigny CH-1015, Switzerland
* Author to whom correspondence should be addressed.
Received: 17 July 2013; in revised form: 19 September 2013 / Accepted: 19 September 2013 / Published: 11 October 2013
PDF Full-text Download PDF Full-Text [257 KB, uploaded 11 October 2013 16:02 CEST]
Abstract: We report results from experimental first-price, sealed-bid, all-pay auctions for a good with a common and known value. We observe bidding strategies in groups of two and three bidders and under two extreme information conditions. As predicted by the Nash equilibrium, subjects use mixed strategies. In contrast to the prediction under standard assumptions, bids are drawn from a bimodal distribution: very high and very low bids are much more frequent than intermediate bids. Standard risk preferences cannot account for our results. Bidding behavior is, however, consistent with the predictions of a model with reference dependent preferences as proposed by the prospect theory.
Keywords: all-pay auction; prospect theory; experiment

Article Statistics

Load and display the download statistics.

Citations to this Article

Cite This Article

MDPI and ACS Style

Ernst, C.; Thöni, C. Bimodal Bidding in Experimental All-Pay Auctions. Games 2013, 4, 608-623.

AMA Style

Ernst C, Thöni C. Bimodal Bidding in Experimental All-Pay Auctions. Games. 2013; 4(4):608-623.

Chicago/Turabian Style

Ernst, Christiane; Thöni, Christian. 2013. "Bimodal Bidding in Experimental All-Pay Auctions." Games 4, no. 4: 608-623.

Games EISSN 2073-4336 Published by MDPI AG, Basel, Switzerland RSS E-Mail Table of Contents Alert