Next Article in Journal
Playing a Game or Making a Decision? Methodological Issues in the Measurement of Distributional Preferences
Previous Article in Journal
How to Split Gains and Losses? Experimental Evidence of Dictator and Ultimatum Games
Article Menu

Export Article

Open AccessArticle
Games 2018, 9(4), 79;

Learning to Set the Reserve Price Optimally in Laboratory First Price Auctions

Economic Research Unit, Indian Statistical Institute, Baranagar, Kolkata, West Bengal 700108, India
School of Business and Economics, Maastricht University, 6211 LK Maastricht, The Netherlands
Madras School of Economics, Chennai, Tamil Nadu 600025, India
Author to whom correspondence should be addressed.
Received: 17 September 2018 / Revised: 27 September 2018 / Accepted: 28 September 2018 / Published: 9 October 2018
PDF [439 KB, uploaded 9 October 2018]


We analyze choices of sellers, each setting a reserve price in a laboratory first price auction with automated equilibrium bidding. Subjects are allowed to gain experience for a fixed period of time prior to making a single payoff-relevant choice. Behavior of more experienced sellers was consistent with benchmark theory: average reserve price for these sellers was independent of the number of bidders and equaled the predicted level. Less experienced sellers however deviated from the theoretical benchmark: on average, they tended to shade reserve price below the predicted level and positively relate it to the number of bidders. View Full-Text
Keywords: reserve price; first-price auction; experience; seller learning reserve price; first-price auction; experience; seller learning

Figure 1

This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).

Share & Cite This Article

MDPI and ACS Style

Banerjee, P.; Khare, S.; Srikant, P. Learning to Set the Reserve Price Optimally in Laboratory First Price Auctions. Games 2018, 9, 79.

Show more citation formats Show less citations formats

Note that from the first issue of 2016, MDPI journals use article numbers instead of page numbers. See further details here.

Related Articles

Article Metrics

Article Access Statistics



[Return to top]
Games EISSN 2073-4336 Published by MDPI AG, Basel, Switzerland RSS E-Mail Table of Contents Alert
Back to Top