An experimental study of a continuous Japanese-English auction for the wallet game

Georgalos, Konstantinos, Goncalves, Ricardo, Ray, Indrajit ORCID: https://orcid.org/0000-0001-5254-3144 and SenGupta, Sonali 2025. An experimental study of a continuous Japanese-English auction for the wallet game. [Discussion Paper]. Cardiff Economics Working Papers E2025, vol. 25. Cardiff: Cardiff Business School.

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Abstract

This paper reports results from a laboratory experiment on a continuous Japanese-English auction in a common-value ‘wallet game’. The main objective is to test whether bidders follow the equilibrium bidding strategy predicted by theory. We find systematic deviations from equilibrium behaviour: instead of bidding according to the Nash equilibrium, subjects appear to rely on expected value (EV) bidding. As a consequence, observed auction prices are higher than the theoretical benchmark, and the winner’s curse occurs in a substantial fraction of auctions. We analyse bidding behaviour in detail and discuss the implications of our findings.

Item Type:	Monograph (Discussion Paper)
Date Type:	Publication
Status:	Submitted
Schools:	Schools > Business (Including Economics)
Subjects:	H Social Sciences > HB Economic Theory
Publisher:	Cardiff Business School
Last Modified:	23 Dec 2025 11:00
URI:	https://orca.cardiff.ac.uk/id/eprint/183398

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