Classroom Experiments of Auctions

Abstract

A few non-computerized classroom auctions of an indivisible object were presented and analyzed. Two of the auctions were played in a classroom of around thirty students. Both auctions have big possibilities of various bids being equal, the effect of which is that, the played Vickery auction is revenue-equivalent to a quite uncommon variation of the ascending-bid auction where defaulting and the auctioneer's calling strategy play vital roles. I examine their revenue-equivalences based on two slightly modified intuitive assumptions of Haile and Tamer: bidders neither risk to pay more than their valuations nor risk to let an opponent win at a price less than or equal to their valuations. The results of the experiments demonstrate the inconsistency of the students' goals.