Demand Reduction in Multi-unit Auctions with Varying Number of Bidders and Units: Evidence from Homegrown Value Auction Experiments

We examine the effect of number of bidders and units on demand reduction effect in the uniform-price auction and the Vickrey auction. We found that increasing the number of bidders increases the first and the second-unit bids in a 2-unit setting and the third and the fourth-unit bids in a 4-unit setting. Increasing the number of units increases the first and the second-unit bids when the number of bidders is lower than the number of units but decreases them when there are more bidders than units. Also, we found that increasing the number of bidders provides significantly higher revenues than those obtained when increasing the number of units. 1 Faical Akaichi (Corresponding author) CREDA-UPC-IRTA. Email: [email protected]. José M. Gil. CREDA-UPC-IRTA. Email: [email protected]. Rodolfo M. Nayga, Jr. Department of Agricultural Economics and Agribusiness. University of Arkansas. Email: [email protected]. We gratefully acknowledge John List and Ximing Wu for their helpful comments.