Theoretically and experimentally, we generalize the analysis of acquiringa company (Samuelson and Bazerman 1985) by allowing for competition ofboth, buyers and sellers. Naivety of both is related to the idea that higherprices exclude worse qualities. While competition of naive buyers...

Collusive agreements are often observed in procurement auctions. They are probablymore easily achieved when competitors’ costs are easily estimated. If, however, the individualcosts of bidders are private information, effective ring formation is difficult to realize.We compare experimentally...

Are commonly known beliefs essential for bidding behavior in asymmetric auctions? Our experimental results suggest that not informing participants how values are randomly generated does not change behavior much and may even make it appear more rational.

Bidding challenges learning theories, since with the same bid, experiences vary stochastically: the same choice can result in either a gain or a loss. In such an environment the question arises how the nearly universally documented phenomenon of loss aversion affects the adaptive dynamics. We...

Two auction mechanisms are studied in which players compete with one another for an exogenously determined prize by independently submitting integer bids in some discrete and commonly known strategy space specified by the auctioneer. In the unique lowest (highest) bid auction game, the winner of...

The unmediated call auction is a useful trading mechanism to aggregate dispersedinformation. Its ability to incorporate information of a single informed insider,however, is less well understood. We analyse this question by presenting a simplecall auction game where both auction prices and limit...

As firms implement tournament bonus reward schemes, mainly the idea is to introduce competition amongst their agents in the order to promote their performance.Tournaments in which agents compete for a bonus by investing effort, are frequentlyapplied, e.g., in development races, political...

A vast literature shows that individuals frequently violate normative principles in reasoning. In evaluatingthe relevance of these findings for psychology, economics, and related disciplines, it is natural to askwhether reasoning errors reflect random aberrations or systematic biases. One...