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Framing the first-price auction

Published online by Cambridge University Press:  14 March 2025

Theodore L. Turocy ,
Elizabeth Watson  and
Raymond C. Battalio
Theodore L. Turocy*
Affiliation:
Department of Economics, Texas A&M University, College Station TX 77843
Elizabeth Watson
Affiliation:
Department of Economics, Texas A&M University, College Station TX 77843
Raymond C. Battalio
Affiliation:
Department of Economics, Texas A&M University, College Station TX 77843
*
e-mail: turocy@econmail.tamu.edu
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Abstract

We revisit the result that, in laboratory independent private values auction, the first-price sealed bid and descending clock (or Dutch) implementations are not isomorphic. We investigate the hypothesis that this arises from framing and presentation effects. Our design focuses on a careful construction of subject interfaces that present the two environments as similarly as possible. Our sessions also consist of more auction periods to test whether any initial framing effects subsequently decrease over time. We find the difference between the implementations persists. To further investigate the difference, we report on an intermediate implementation which operates like the Dutch auction, but in which the clock continues to tick to the lowest price without informing bidders when others have bid on the object.

Keywords

AuctionsFirst-priceIsomorphism

JEL classification

D44: Auctions C90: General
Type
Research Article
Information
Experimental Economics , Volume 10 , Issue 1 , March 2007 , pp. 37 - 51
Copyright
Copyright © 2007 Economic Science Association

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Footnotes

†

Deceased.

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