EXPLORING GROUP BIDDING IN A COMMON VALUE AUCTION: IS THERE SAFETY IN NUMBERS?

Abstract

There are few studies that examine group bidding in common value auctions even though groups are routinely called upon to decide on the bids for a variety of assets. Researchers that do look at groups are often not discriminatory about the composition of the groups they study. Therefore, the majority of these studies can only go as far as to make claims about the aggregate performance of groups relative to the performance of individuals. This study introduces gender to help explain the bidding behaviours of both the individuals and the groups who are made to bid in a common value auction experiment. A special focus was given to learning as it is an important aspect in being able to make profits in such an auction. The results of this study revealed that gender differences between same-gender groups existed. In particular, all-female groups did the worst in bidding as inexperienced bidders. However, they learnt faster then the men in avoiding losses and emerged better than the all-male groups and the individuals as experienced bidders.