Explaining Overbidding in First Price Auctions Using Controlled Lotteries
通过将一级价格拍卖与等价的彩票对比，研究个体在激励相同的不同制度下行为差异，发现高价值竞拍者在拍卖中出价显著高于彩票，且两者差异可通过展示获胜概率部分消除。
Abstract In this paper, we study the behavior of individuals when facing two different, but incentive-wise identical, institutions. We pair the first price auction with an equivalent lottery. Once a subject is assigned a value for the auctioned object, the first price auction can be modeled as a lottery in which the individual faces a given probability of winning a certain payoff. This set up allows us to explore to what extent the misperception of the probability of winning in the auction is responsible for bidders in a first price auction to bidding above the risk neutral Nash equilibrium prediction. The first result we obtain is that individuals, even though facing the same choice over probability/payoff pairs, behave differently depending on the type of choice they are called to make. When facing an auction, subjects with high values tend to bid significantly above the bid they choose in the corresponding lottery environment. We further find that in both the lottery and the auction environments, subjects tend to bid in excess of the bid predicted by the risk neutral model, at least for intermediate range values. Finally, we find that the difference between the lottery behavior and the auction behavior is substantially, but not totally, eliminated by showing the subjects the probability of winning the auction.