Author
Sander Onderstal
Other affiliations: Tinbergen Institute
Bio: Sander Onderstal is an academic researcher from University of Amsterdam. The author has contributed to research in topics: Common value auction & English auction. The author has an hindex of 14, co-authored 80 publications receiving 996 citations. Previous affiliations of Sander Onderstal include Tinbergen Institute.
Papers published on a yearly basis
Papers
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TL;DR: In this paper, the authors show that standard winner-pay auctions are inept fund-raising mechanisms because of the positive externality bidders forgo if they top another's high bid.
Abstract: We show that standard winner-pay auctions are inept fund-raising mechanisms because of the positive externality bidders forgo if they top another's high bid. Revenues are suppressed as a result and remain finite even when bidders value a dollar donated the same as a dollar kept. This problem does not occur in lotteries and all-pay auctions, where bidders pay irrespective of whether they win. We introduce a general class of all-pay auctions, rank their revenues, and illustrate how they dominate lotteries and winner-pay formats. The optimal fund-raising mechanism is an all-pay auction augmented with an entry fee and reserve price.
188 citations
TL;DR: In this article, a simple game called the chopstick auction is analyzed in which bidders are confronted with the exposure problem and it is shown that the game has an efficient equilibrium and is revenue equivalent with the second-price sealed-bid auction in which the exposure is not present.
Abstract: Multi-unit auctions are sometimes plagued by the so-called exposure problem In this paper, we analyze a simple game called the chopstick auction in which bidders are confronted with the exposure problem We analyze the chopstick auction with incomplete information both in theory and in a laboratory experiment In theory, the chopstick auction has an efficient equilibrium and is revenue equivalent with the second-price sealed-bid auction in which the exposure problem is not present In the experiment, however, we find that the chopstick auction is slightly less efficient but yields far more revenue than the second-price sealed-bid auction
166 citations
TL;DR: In this paper, the authors compare three mechanisms used to raise money for charities: first-price winner-pay auctions, first price all-pay auction, and lotteries.
Abstract: We experimentally compare three mechanisms used to raise money for charities: first-price winner-pay auctions, first-price all-pay auctions, and lotteries. We stay close to the characteristics of most charity auctions by using an environment with incomplete information and independent private values. Our results support theoretical predictions by showing that the all-pay format raises substantially higher revenue than the other mechanisms.
86 citations
TL;DR: In this article, the authors compare the collusive properties of two standard auctions, the English auction and the first-price sealed-bid auction, and a lesser-known format, the Amsterdam (second-price) auction.
Abstract: The danger of collusion presents a serious challenge for auctioneers. In this paper, we compare the collusive properties of two standard auctions, the English auction and the first-price sealed-bid auction, and a lesser-known format, the Amsterdam (second-price) auction. In the Amsterdam auction, the highest losing bidder earns a premium for stirring up the price. We study two settings: in one, all bidders can collude, and in another, only a subset is eligible. The experiments show that the Amsterdam auction triggers less collusion than the standard auctions. We compare experimental results to theoretical predictions, and provide an explanation where they differ.
57 citations
TL;DR: In this article, the authors study the predictive power of the Fehr-Schmidt model of inequity aversion and its robustness to reciprocity and stakes and find that the model is robust to both of them.
Abstract: Using a laboratory experiment, we study the predictive power of the Fehr–Schmidt (1999) model of inequity aversion and its robustness to reciprocity and stakes. We find stronger evidence for the model’s predictive power at the individual level than what the existing literature suggests. This finding is robust to stakes. However, the model’s predictive power is highly reduced if subjects can reciprocate others’ actions. This suggests that parameter estimates obtained in an environment that allows for reciprocal responses yield a bias in the parameter estimates. In particular, previous estimates (especially of the disutility of disadvantageous inequity aversion) may overestimate the importance of inequity aversion.
41 citations
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1,083 citations
TL;DR: In this article, the authors proposed a new ascending-bid auction for homogeneous goods, such as Treasury bills or telecommunications spectrum, where items are awarded at the current price whenever they are "clinched," and the price is incremented until the market clears.
Abstract: When bidders exhibit multi-unit demands, standard auction methods generally yield inefficient outcomes. This article proposes a new ascending-bid auction for homogeneous goods, such as Treasury bills or telecommunications spectrum. The auctioneer announces a price and bidders respond with quantities. Items are awarded at the current price whenever they are "clinched," and the price is incremented until the market clears. With private values, this (dynamic) auction yields the same outcome as the (sealed-bid) Vickrey auction, but has advantages of simplicity and privacy preservation. With interdependent values, this auction may retain efficiency, whereas the Vickrey auction suffers from a generalized Winner's Curse.
779 citations
TL;DR: It is found that subjects send less in trust games conducted in Africa than those in North America, and the amount sent in the game is significantly affected by whether payment is random, and whether play is with a simulated counterpart.
Abstract: We collect data from 162 replications of the Berg, Dickhaut, and McCabe Investment game (the “trust” game) involving more than 23,000 participants. We conduct a meta-analysis of these games in order to identify the effect of experimental protocols and geographic variation on this popular behavioral measure of trust and trustworthiness. Our findings indicate that the amount sent in the game is significantly affected by whether payment is random, and whether play is with a simulated counterpart. Trustworthiness is significantly affected by the amount by which the experimenter multiplies the amount sent, whether subjects play both roles in the experiment, and whether the subjects are students. We find robust evidence that subjects send less in trust games conducted in Africa than those in North America.
768 citations
Posted Content•
TL;DR: In this paper, the authors study a contest with multiple (not necessarily equal) prizes and show that for any number of contestants having linear, convex or concave cost functions, and for any distribution of abilities, it is optimal for the designer to allocate the entire prize sum to a single ''first'' prize.
Abstract: We study a contest with multiple (not necessarily equal) prizes. Contestants have private information about an ability parameter that affects their costs of bidding. The contestant with the highest bid wins the first prize, the contestant with the second-highest bid wins the second prize, and so on until all the prizes are allocated. All contestants incur their respective costs of bidding. The contest's designer maximizes the expected sum of bids. Our main results are: 1) We display bidding equlibria for any number of contestants having linear, convex or concave cost functions, and for any distribution of abilities. 2) If the cost functions are linear or concave, then, no matter what the distribution of abilities is, it is optimal for the designer to allocate the entire prize sum to a single ''first'' prize. 3) We give a necessary and sufficient conditions ensuring that several prizes are optimal if contestants have a convex cost function.
678 citations
01 Jan 1994
TL;DR: Experimental economics became an autonomous field of research after WWII in concomitance with the increasing interest in Microeconomic theory as discussed by the authors, and the VonNeumann-Morgenstern's Expected Utility Theory gave a lot of opportunity to test behaviour trough lotteries.
Abstract: Experimental Economics became an autonomous field of research after WWII in concomitance with the increasing interest in Microeconomic theory. The VonNeumann-Morgenstern’s Expected Utility Theory gave a lot of opportunity to test behaviour trough lotteries (Allais Paradox...). In 1952 the Conference of Santa Monica grounded Experimental Economics on more theoretical basis and gave to the discipline an autonomous methodological structure.
587 citations