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Teams and individuals in standard auction formats: decisions and emotions

Published online by Cambridge University Press:  14 March 2025

Maria Karmeliuk Open the ORCID record for Maria Karmeliuk [Opens in a new window] ,
Martin G. Kocher Open the ORCID record for Martin G. Kocher [Opens in a new window]  and
Georg Schmidt Open the ORCID record for Georg Schmidt [Opens in a new window]
Maria Karmeliuk*
Affiliation:
Novosibirsk State University, Novosibirsk, Russia
Martin G. Kocher*
Affiliation:
University of Vienna, Vienna, Austria University of Gothenburg, Gothenburg, Sweden
Georg Schmidt*
Affiliation:
University of Vienna, Vienna, Austria
*
m.v.karmeliuk@nsu.ru
martin.kocher@univie.ac.at
georg.schmidt@univie.ac.at
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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 provide evidence that the observed difference could be explained by better reasoning abilities of teams. Emotions seem to play a role in determining bids, but the effect of emotions on bidding does not differ between individuals and teams.

Keywords

AuctionsTeam decision-makingExperimentOverbidding

JEL classification

D44: Auctions C91: Laboratory, Individual Behavior C92: Laboratory, Group Behavior
Type
Original Paper
Information
Experimental Economics , Volume 25 , Issue 5 , December 2022 , pp. 1327 - 1348
Copyright
Copyright © The Author(s), under exclusive licence to Economic Science Association 2022.

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Footnotes

Supplementary Information The online version contains supplementary material available at https://doi.org/10.1007/s10683-022-09769-4.

Financial support by Deutsche Forschungsgemeinschaft through CRC TRR 190 (project number 280092119) is gratefully acknowledged. We are grateful to Fangfang Tan for very helpful comments and to two anonymous referees and the editor whose suggestions improved the paper a lot. The replication material for the study is available at: https://doi.org/10.5281/zenodo.6946038.

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