A Theory of Jump Bidding in Ascending Auctions∗
نویسندگان
چکیده
Jump bidding is a commonly observed phenomenon that involves bidders in ascending auctions submitting bids higher than required by the auctioneer. Such behavior is typically explained as due to irrationality or to bidders signaling their value. We present field data that suggests such explanations are unsatisfactory and construct an alternative model in which jump bidding occurs due to strategic concerns and impatience. We go on to examine the impact of jump bidding on the outcome of ascending auctions in an attempt to resolve some policy disputes in the design of ascending auctions. JEL Codes: D44, C90
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The authors gratefully acknowledge the support from the New Faculty Research Grants, the Institute for the Study of Business Markets (ISBM), Smeal College of Business, Penn State University and the Laboratory for Economic Management and Auctions. Katok gratefully acknowledges the support of the National Science Foundation. The authors also thank Diana Wu for her assistance in completing the exp...
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