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I4R Discussion Paper Series #74


Yasmine Eissa (Cairo University), Paul Rosmer (Ludwig-Maximilians-University, Berlin School of Economics), Luther Yap (Princeton University)

A Comment on The Common-Probability Auction Puzzle (2023)

Ngangou´e and Schotter (2023) investigate common-probability auctions. By running an experiment, they find that, in contrast to the substantial overbidding found in common-value auctions, bidding in strategically equivalent common-probability auctions is consistent with the Nash equilibrium. We reproduce their results in R, conduct robustness checks on how their sample was constructed, and consider possible heterogeneity. We confirm their documented qualitative results.