An experimental investigation of entry cost effects in sealed-bid dollar auctions

We experimentally study the effect of entry costs on bidding and entry behavior in common value auctions. We find, with entry costs, players bid lower in first price and higher in second price auctions, compared to no entry fee auctions. ►We study the effect of entry costs on bidding and entry behavior, through a complete information common value auction. ► We run experimental first and second price auctions, both with and without entry costs. ► We find that with entry costs, players bid lower in the first price and higher in second price auctions, compared to the no entry fee auctions.