Authors:
Karmeliuk, Maria (LMU Munich)
Kocher, Martin (University of Vienna)
Abstract:
Our study compares individual and team bidding in standard auction formats: first-price, second-price and ascending-price (English) auctions with independent private values. In a laboratory experiment, we find that individuals overbid more than teams in first-price auctions and deviate more from bidding their own value in second-price auctions. However we observe no difference in bidding behavior in English auctions. Based on control variables, we claim that the observed difference can be explained by better reasoning abilities of teams. Emotions play a role in determining bids, but the effect of emotions on bidding does not differ between individuals and teams.
Keywords:
auctions; team decision-making; experiment; overbidding
JEL-Classification:
C91; C92; D44