Bidding into Bankruptcy: How Auction Order Affects Overbidding and Losses

15:40-17:00, Wednesday, April 22, 2026

I-206, Boxue Building

Professor Hikmet Günay is Professor of Economics at the University of Manitoba, and Distinguished Professor of Economics at Dongbei University of Finance and Economics. His research covers industrial organization, microeconomics, economic theory, and game theory. He received his PhD in Economics from the University of Iowa in 2003, and also earned an MS in Mathematics and an MA in Economics from the same institution. His current research focuses on sequential auctions, and he has also published on social learning, strategic delay, mergers, and related topics. His work has appeared in journals including Journal of Economic Theory, International Journal of Industrial Organization, Journal of Corporate Finance, Canadian Journal of Economics, Economic Theory, and Review of International Economics. 

Global bidders in sequential auctions face exposure risk when bidding for complementary goods whose values di er in uncertainty. We study how auction order affects this risk in a sequential second-price auction with heterogeneous products, where one good has relatively high valuation variance and the other has low valuation variance. Motivated by simulation-based comparative statics infinite-variance environments, we use laboratory experiments to examine whether auctioning the low-variance good first increases the likelihood of ex-post losses for global bidders. We find that negative payoffs occur significantly more often when the low-variance product is sold first, across both low- and high-synergy environments. Efficiency and revenue are primarily driven by the level of synergy and are not systematically influenced by order. We also document systematic overbidding that depends on auction order and interim outcomes, with bidding behavior differing sharply depending on whether bidders win or lose the first product.

For more information of the seminar, scan the following QR code(s) to join Tencent QQ group (904 544 292) or WeChat group named "IAER Seminar (4)", please.

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(QR code is valid until April 27, 2026)