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An Experimental Study of Auctions with Externalities

Chulyoung Kim et al.

Journal of Institutional and Theoretical Economics2025https://doi.org/10.1628/jite-2025-0027article
AJG 2ABDC B
Weight
0.50

Abstract

This paper theoretically and experimentally studies first-price and second-priceauctions in a complete information setting where one bidder creates a positiveor negative externality on the other two bidders. The two bidders subject toexternalities can be considered as playing coordination and anti-coordinationgames under positive and negative externalities, respectively, and the issuesof coordination failure and free riding arise. Our experimental data show thatcoordination failure occurs more frequently than free riding, which suggeststhat participants react more sensitively to negative externalities than to positiveones. Moreover, the existence of inefficient equilibria increases coordinationfailure and reduces free riding.

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https://doi.org/https://doi.org/10.1628/jite-2025-0027

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@article{chulyoung2025,
  title        = {{An Experimental Study of Auctions with Externalities}},
  author       = {Chulyoung Kim et al.},
  journal      = {Journal of Institutional and Theoretical Economics},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.1628/jite-2025-0027},
}

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An Experimental Study of Auctions with Externalities

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.50 × 0.4 = 0.20
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

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