| Article ID: | iaor2003673 |
| Country: | Germany |
| Volume: | 30 |
| Issue: | 3 |
| Start Page Number: | 321 |
| End Page Number: | 350 |
| Publication Date: | Jan 2001 |
| Journal: | International Journal of Game Theory |
| Authors: | Levin D., Smith J.L. |
Most of the literature on auctions with endogenous entry assumes that, in equilibrium, the number of entrants is deterministic. We discuss a series of experiments designed to test the alternative hypothesis that, even in equilibrium, the number of entrants is stochastic. This distinction has strong implications for auction performance, the design of optimal mechanisms, and social welfare. Our results strongly reject the hypothesis of deterministic entry and tend to confirm the alternative hypothesis that entry is stochastic.