Participants’ competitiveness and bidding behaviour in experimental auctions: an application to the Spanish market

Abstract

The aim of the paper was to examine if experimental auctions are demand revealing regardless the level of participants’ competitiveness. Then, we design an experimental auction with two treatments to check if the level of participants’ competitiveness does affect their bidding behavior. Both treatments had all the same designed characteristics except that in the second treatment, participants who reported the highest levels of competitiveness were not allow to participate in the auction. Then, we could directly compare bids from both treatments to test differences in bidding behavior between them. Our findings generally indicate that the level of participants’ competitiveness does not affect bidding behavior and then, homegrown experimental auctions are demand revealing in practice regardless the level of participants’ competitiveness.