Data and code for: The Common-Probability Auction Puzzle

This paper presents a puzzle of the behavior of experimental subjects in what we call common-probability auctions. In common-value auctions, uncertainty is defined over values, while in common-probability auctions, uncertainty is defined over probabilities. We find that in contrast to the substantial overbidding found in common-value auctions, bidding in strategically equivalent common-probability auctions is consistent with Nash equilibrium. In order to explain our results, we run treatments to identify whether our observed difference stems from the way our subjects estimate the value of the object they are bidding for in a competitive environment rather than the way they bid conditional on these valuations. We conclude it is the former.