Is the Experimental Auction a Dynamic Model?
Experimental auctions are generally thought of as static markets. This paper presents the results of an experimental auction designed to test whether participants’ perceptions regarding the relative difficulty of delaying or reversing a transaction outside the experimental market systematically affect their willingness-to-pay bids. The results show that auction participants’ perceptions significantly impact their bids in a manner that is consistent with real option theory. These results suggest that economists must be careful to consider the existence of outside markets when designing experimental auctions.
Corrigan, Jay R., "Is the Experimental Auction a Dynamic Model?" (2005). Environmental and Resource Economics 31(1): 35-45. Faculty Publications. Paper 45.
Environmental and Resource Economics