Sequential auctions with synergies: An experimental analysis

In this paper we show experimentally that in a sequential auction the presence of synergies leads to more overbidding which in turn may result in bankruptcies. In line with theoretical predictions we find that the seller benefits from the buyers’ synergies. In contrast to theory the buyers also benefit from these synergies. Moreover, opposed to theory and many empirical findings we do not observe declining prices. Finally we find that the overbidding is increasing in the valuation of the object on which the synergy does not materialize and we attribute this finding to anchoring.