Is the ‘Linkage Principle’ Valid? Evidence from the Field

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We present field evidence concerning experienced bidders that supports the linkage principle—specifically, the prediction that in affiliated-values auction environments the expected revenues generated at open-outcry, ascending-bid auctions are higher than those under auction formats that reveal less information to participants. Using field data from a large seller of automobiles who experimented with different selling formats, we have found that average revenues were significantly higher under an English auction than under a dynamic Internet auction format that revealed less information to bidders.