1. Outline  In-Class Experiment on First-Price Sealed-Bid Auctions  Professor John Morgan: Internet Auctions  The Winner’s Curse Hypothesis: Kagel and Levin (1986)  Revenue equivalence and strategic equivalence hypotheses: Auction Formats

2. Dutch vs. English with Private Values Drawn from [0,1]

3. Experimental Design

4. Hypothesis H0

5. Plots of Price Differences

8. Hypotheses H1 and H2

9. First vs. Second Price Sealed-Bid

10. Experimental Design

11. Hypothesis H ’ 0

12. Test of Hypothesis H ’ 0

13. Plot of Price Difference

17. Hypothesis H ’ 1 and H’2

18. Over-bidding in First-Price Auction

19. Summary Dutch versus English auctions –Dutch oral auction yields prices optimal price –H1 and H2 supported for both auctions First-price versus Second-price sealed-bid auction –Second-price sealed-bid auction not significantly optimal price –Similarly, H1’ and H2’ supported for Second-price sealed-bid auction but not for First-price auction English and Second-price auctions are isomorphic in the latter rounds Behavior in all except first-price sealed bid consistent with RNNE