Auction Design with Avoidable Fixed Costs: An Experimental Approach

Advances in information technology and computational power have opened the doors for auctioneers to explore a range of auction formats by considering varying degrees of bid expressivity and different payment rule, e.g., single price vs. discriminatory prices. While it is clear that one can design more complicated auctions, it is still not clear if should do so and which auction parameters have the greatest impact on the performance on cost and efficiency. The purpose of this paper is to gain some insight into this question, via analytical and experimental methods.