The experiment requires three treatments using the low price sealed bid mechanism: one without a dynamic reserve price, one using a dynamic reserve price in a single market, and the third, using a dynamic reserve price with multiple markets.
Using a between-subjects design, each participant is exposed to only one of the three conditions and plays multi-round auctions.
In round 1 of each sequence, everyone is told their realized cost and everyone participates. In each subsequent round, participants are told their realized cost for that round and will be allowed to choose whether or not to participate in the auction for that round. If they choose not to participate in a round, they will not be able to participate for the remaining rounds in that sequence, but they will be able to rejoin in the subsequent sequence. After deciding to participate, the participants are informed of the number of competitors who are participating. Each competitor will have received a realized cost using the same method with all draws being independent.