INDIVIDUAL BEHAVIOR AND BIDDING HETEROGENEITY IN SEALED BID AUCTIONS WHERE THE NUMBER OF BIDDERS IS UNKNOWN

This article uses laboratory data from a series of first‐price (FP) and second‐price (SP) sealed bid auctions in which the number of bidders is unknown to test for possible deviations of individual behavior from theory and study the source of heterogeneity in bidding. In SP auctions we find a substantial amount of coincidence with theory. We observe systematic deviations from risk neutral bidding in FP auctions and show theoretically that these deviations are consistent with risk averse preferences. We find essentially no heterogeneity in bidding in SP auctions where risk preferences and the number of bidders do not affect the optimal bid, while in the FP auctions heterogeneity in bidding persists with experience. We find that heterogeneity in bidding in FP auctions is consistent with heterogeneity in risk preferences, the attempt to count the number of bidders in the auction, and bidder specific noise. (JEL D44, C91)     

STRATEGIC EXCLUSION OF THE HIGHEST‐VALUED BIDDERS IN WHOLESALE AUTOMOBILE AUCTIONS

By restricting bidders to be qualified dealers, wholesale automobile auctions exclude the bidders who place the highest value on the vehicles: consumers. This article provides an explanation for this puzzling entry restriction by modeling the inventory‐management decisions of a firm. If an automobile dealer has more vehicles in inventory than is optimal, it cannot reduce its inventory by selling directly to consumers without impacting the demand for the automobiles that remain. However, if the dealer sells his/her excess inventory to a competitor, the demand for his/her remaining vehicles increases as the competitor responds by acquiring fewer additional vehicles. We demonstrate that for any market demand function and any cost of the competitor acquiring additional vehicles, a dealer with excess inventory does better by selling a subset of its vehicles to a competitor rather than directly to consumers. We discuss the market for wholesale automobiles in relation to other markets where goods are also auctioned but where entry is not restricted to qualified dealers. Doing so allows us to compare our inventory‐management explanation to common explanations provided by industry practitioners. We find that intuitive alternative stories do not consistently explain practices across markets. (JEL D44, L11, L62)     

INCENTIVES AND BEHAVIOR IN ENGLISH, DUTCH AND SEALED-BID AUCTIONS

The Pareto optimality and price behavior of English and Dutch oral auctions, and First-Price and Second-Price sealedbid auctions are compared under various procedures for assigning valuations among cash motivated bidders. The Vickrey propositions with respect to the mean and variance of prices under the English, Dutch and Second-Price auctions are not falsified by the data. Individual behavior and prices in the First-Price auction deviates considerably from Vickrey's Nash postulate. Behaviorly, the English and Second-Price auctions appear to be isomorphic, but the Dutch and First-Price auctions may not be isomorphic.     

THE ROLE OF THE BIDDING PROCESS IN PRICE DETERMINATION: JUMP BIDDING IN SEQUENTIAL ENGLISH AUCTIONS

This paper uses data collected from a series of public auctions of used cars in New Jersey to examine how strategic bidding affects price determination in open‐outcry English auctions. “Jumps” in the bidding, which occur when a new offer exceeds the old offer by more than the minimum bid increment, are highly pervasive and consistently related to the item’s presale estimated price. The size of the jumps is not affected by the selling order, however. This jump bidding pattern suggests that open‐outcry auctions are more appropriately interpreted with models that assume common‐item valuations rather than models assuming private valuations. (JEL D44)     

FIXED REVENUE AUCTIONS: THEORY AND BEHAVIOR

In this paper, we study auctions in which the revenue is fixed but the quantity is determined by the auction mechanism. Specifically, we investigate the theory and behavior of English quantity clock, Dutch quantity clock, last‐quantity sealed bid, and penultimate‐quantity sealed bid auctions. For theoretically equivalent fixed quantity and fixed revenue auctions, we find that fixed revenue auctions are robust to all the previously observed empirical regularities in fixed quantity auctions. (JEL C9, D4, L2)     

THE SOCIAL GEOGRAPHY OF GENDER-SWITCHING IN VIRTUAL ENVIRONMENTS ON THE INTERNET

The virtual social worlds of the internet give people unparalleled control over the construction and presentation of their identities. Gender-switching is perhaps the most dramatic example of how people exercise this control. It occurs when people present a gender that is different from their biological sex. While gender-switching figures prominently in academic commentaries and popular writings about on-line social life, there is little systematic research on the phenomenon. On-line surveys of two stratified random samples (N's=233 and 202) of MOO users were conducted. The majority of participants (60 per cent) in social MOOs (popular text-based internet social venues) had never engaged in gender-switching, while the majority in role-playing MOOs were either gender-switching currently (40 per cent) or had done so in the past (16.7 per cent). More than half of those who currently gender-switched did so for less than 10 per cent of their time on-line. In spite of the freedom to use indeterminate or even plural gender identities, most participants who switched genders (78.7 per cent) did so within traditional binary conventions (male to female, female to male). The primary reason for gender-switching was the desire to play roles of people different from one's self. The primary barrier to gender-switching was the belief that it is dishonest and manipulative. Attitudes toward gender-switching and on-line participation were better predictors of gender-switching than personal background demographics or personality measures. The images of gender-switching that emerge from this first systematic study of the phenomenon are considerably more benign than that usually portrayed in the literature. Gender-switching appears to be practised by a minority of MOO users for a small percentage of their time on-line. Gender-switching within MOOs of all kinds might best be understood as an experimental behaviour rather than as an enduring expression of sexuality, personality, or gender politics.     

FIRST-PRICE COMMON VALUE AUCTIONS: BIDDER BEHAVIOR AND THE "WINNER'S CURSE"

Experimental auction markets are characterized by a strong winner's curse in early auction periods as high bidders consistently lose money, failing to account for the adverse selection problem inherent in winning the auction. With experience and bankruptcy on the part of the worst offenders, subjects earn positive average profits, but these are far below Nash equilibrium predictions as a sizable minority of bids exceed the expected value of the item conditional on having the highest estimate of value. Individual bidding behavior is explored to identify the mechanism whereby market outcomes no longer display the worst effects of the winner's curse.     

IMPLICATIONS OF INTERNET TECHNOLOGY FOR MEDICAL SOCIOLOGY IN THE NEW MILLENNIUM

This research examines how parental heterosexism—negative attitudes toward homosexuals and homosexuality—and other family characteristics relate to the development of children's attitudes toward people with HIV/AIDS (PWA). Attention is directed to the overall relationship between parents’ and children's attitudes and to the potential mechanisms through which these linkages are manifested. Based on social learning theories of childhood socialization, a range of mechanisms is considered, focusing on heterosexist attitudes in parents and communication with children about AIDS. Findings indicate that parental attitudes concerning homosexuals influence children's attitudes toward PWA, implying that there can be negative as well as positive consequences of parents’ beliefs on children's attitudes. The possibility of negative parental effects on children's prejudices toward PWA suggests that in-school HIV/AIDS education at younger ages is more important than previously thought.     

THE POLITICAL ECONOMY OF TIME IN THE INTERNET ERA: FEMINIST PERSPECTIVES AND CHALLENGES

This paper examines the gender matrix of time, arguing for cross-disciplinary consideration of political economy, globalization and technology to achieve a detailed understanding of gendered hierarchies of time and the ways in which public/private identifications of social space and time have variously constructed and maintained them. It is argued that women are alienated from their own time, which is identified as most legitimately allocated to the service of others both in the home and at work. The inter-relationship of technologies and gendered identities is explored in relation to public/private divisions and the political-economic and scientific-technological knowledge processes that contribute to upholding them. ICTs reflect these historically established gendered patterns, but international projects such as 'Women on the Net' also demonstrate the capacities of these technologies for disrupting the gender matrix of time through their use by women for women.     

INVESTIGATIONS CONCERNING THE DYNAMICS OF CONSUMER BEHAVIOR IN UNCERTAIN ENVIRONMENTS

This paper reports the results of several experiments investigating dynamic consumer behavior. When consumers know their incomes and prices but are uncertain about their preferences, we find that they typically adopt a two-step approach to locating optimal consumption bundles. Initially, a grid search method is employed; this is followed by a gradient search method. An interesting phenomenon observed in many of our experiments is a tendency to consume a bundle well away from the optimum, immediately after the optimum is located. The effects of income and price changes are also studied.     

MARKET POWER IN ORAL DOUBLE AUCTIONS

This paper reports the results of a series of oral-double-auction experiments in which some traders possess market power. A market is set up in which the configuration of the supply and demand curves leads to an asymmetry between buyers and sellers in their abilities to influence transactions prices. This market structure does not always lead to convergence to the competitive equilibrium price despite the competitive nature of the oral-double-auction institution. The nonconvergence occurs most frequently in the experiments involving experienced subjects.     

THE HAYEK HYPOTHESIS IN EXPERIMENTAL AUCTIONS: INSTITUTIONAL EFFECTS AND MARKET POWER

We report twelve market experiments utilizing a "seller market power" supply and demand structure where two of five sellers can unilaterally increase their profit by withholding supply. The data indicate that both the double auction and posted offer institutions result in traders extracting the bulk of the potential gains from exchange in the market; however, prices generally occur above the competitive equilibrium prediction. Market power in the form of strategic supply withholding does not appear to be responsible for the supra-competitive prices.     

IN SEARCH OF GIFFEN BEHAVIOR

This paper develops a theory of Giffen behavior that results from a second rationing constraint. In contrast to standard analysis, this approach is virtually independent of the specific form of consumer preferences. The effect is first developed in a two-good world along with an example, then extended to a more general case to determine if the effect vanishes as the choice set is expanded. The results demonstrate that Giffen behavior is plausible when a second rationing constraint applies and, furthermore, adding additional goods to the choice set does not necessarily cause the effect to vanish.     

THE SOCIAL IMPACT OF BROADBAND HOUSEHOLD INTERNET ACCESS

Broadband changes everything. Or so we are told. But does it? There is only one way to find out - follow people who move from narrowband to broadband internet access and see what changes. This paper reports exactly this kind of analysis using data from a two wave European panel study (e-Living) and the lagged endogenous regression approach to see if switching to broadband increases the time spent online, the use of online communication services, the breadth of internet activities and the amount of online spend, and whether it decreases the time spent watching TV and the level of social leisure activities. The results suggest, in the main, that switching to broadband made little difference for this group of early broadband adopters who were already heavy internet users. There was no evidence of an online spend or social leisure substitution effect although there was evidence of a reduction in time spent watching television, and an increase in email in use, time spent online and breadth of internet use. In all cases however it was the previous levels of behaviour that were the most significant and switching to broadband was, in general, one of the least strong effects.     

SOME EVIDENCE ON LATE BIDDING IN EBAY AUCTIONS

Bidding in the last seconds or minutes of an auction is a common strategy in Internet auctions with fixed end‐time. This paper examines the three explanations of late bidding in eBay auctions that survived the first scrutiny in Roth and Ockenfels (2002) . There is no indication that late bidding could lead to collusive gains for bidders. Late bidding is a strategic response to the presence of bidders placing multiple bids. Experts protecting their private information are typically the last to bid, while collectors are often the first. As bidders gain familiarity with eBay rules, they tend to bid slightly earlier. (JEL D44)     

RACIAL/ETHNIC DIFFERENCES IN THE POLITICAL BEHAVIOR OF AMERICAN RELIGIOUS CONGREGATIONS

In this study we present evidence which supports the use of retrospective research designs to study the transition from delinquency to adult deviance. Delinquency rates based on adolescents’ responses to the Richmond Youth Study in 1965 are compared to the rates based on retrospective accounts of delinquency provided by adults to the Epidemiologic Catchment Area Study in 1981–82. These comparisons were enhanced by controlling for race, sex, birth cohort and the greater period at risk of delinquency experienced by the adult respondents. The item specific pattern of adolescent behavior recalled by adult respondents in 1981–82 is very similar to that reported by adolescents in 1965.     

PRICING ANOMALIES IN THE MARKET FOR DIAMONDS: EVIDENCE OF CONFORMIST BEHAVIOR

Some goods are consumed not just for their intrinsic utility but also for the impression their consumption has on others. We analyze the market for such a commodity—diamonds. We collect data on price and other attributes from the inventories of three large online retailers of diamonds. We find that people are willing to pay premiums upward of 18% for a diamond that is one‐half carat rather than slightly less than a half carat and between 5% and 10% for a one‐carat rather than a slightly less than one‐carat stone. Since a major portion of larger gem‐quality diamonds are used for engagement rings, such an outcome is consistent with Bernheim's model of conformism, where individuals try to conform to a single standard of behavior that is often established at a focal point. In this case, prospective grooms signal their desirability as a mate by the size of the diamond engagement ring they give their fiancées. (JEL A1, D4)     

SEALED-BID VERSUS OPEN AUCTIONS: THE EVIDENCE

Data from U.S. Forest Service timber auctions are used to test Vickrey's original proposition that sealed-bid and open auctions yield equal revenue. Models for the high-bid in an auction are specified and estimated using three different procedures: ordinary least squares, two stage least squares, and maximum likelihood. The second two procedures include a second equation which accounts for the Forest Service's auction choice and therefore control for selection bias. These two procedures, which unlike ordinary least squares yield consistent estimators, imply a statistically and economically insignificant difference in high-bids between sealed-bid and open auctions.