American Economic Review: Vol. 89 No. 5 (December 1999)
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Using Field Experiments to Test Equivalence between Auction Formats: Magic on the Internet
Lucking-Reiley, David. 1999. "Using Field Experiments to Test Equivalence between Auction Formats: Magic on the Internet." American Economic Review, 89(5): 1063-1080.
William Vickrey's predicted equivalences between first-price sealed-bid and Dutch auctions, and between second-price sealed-bid and English auctions, are tested using field experiments that auctioned off collectible trading cards over the Internet. The results indicate that the Dutch auction produces 30-percent higher revenues than the first-price auction format, a violation of the theoretical prediction and a reversal of previous laboratory results, and that the English and second-price formats produce roughly equivalent revenues.
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Lucking-Reiley, David (Vanderbilt U)