Elicited bid functions in (a)symmetric first-price auctions

compared to the RNNE or RANE predictions. Interestingly, the average shape of convex EBR
functions is almost identical to the one predicted in the RNNE for both treatments (cf. Figure
1) so that the low-balling prediction of Maskin and Riley (2000a) is empirically robust to the
behavior of Weak bidders.

Treatment LOW

■ Obs □EBR □ Matched

■ Obs □EBR □ Matched

Figure 3: Distribution of bid function shapes in LOW and MIX (S: Strong, W: Weak)

The submission of concave bid functions by Weak bidders (49%) is not supported by the
RANE (or RNNE) prediction. However, such a shape is frequently recommended as a best-
reply to the observed behavior of Strong bidders, since 75% of all EBR functions for Weak
bidders are concave. In both treatments, such matched cases with concave functions constitute
about 40% of all bid functions submitted by Weak bidders. Furthermore, while Nash
equilibrium predicts convex bid functions for Weak bidders in both treatments, the observed
and the EBR functions are convex in only about 20% to 30% of the cases. The plots in the
lower panels of Figure 4 reveal a close fit of the shape of the average concave bid functions to

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