Auctions vs. Negotiations with Cash and Equity

Last registered on October 13, 2025
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Pre-Trial

Trial Information

General Information

Title
Auctions vs. Negotiations with Cash and Equity
RCT ID
AEARCTR-0016957
Initial registration date
October 08, 2025

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
October 13, 2025, 10:10 AM EDT

First published corresponds to when the trial was first made public on the Registry after being reviewed.

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Primary Investigator

Name
Olga Rud
Affiliation
University of Stavanger
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Other Primary Investigator(s)

PI Name
Jean Paul Rabanal
PI Affiliation
University of Stavanger
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PI Name
Tom-Reiel Heggedal
PI Affiliation
BI Norwegian Business School
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Additional Trial Information

Status
In development
Start date
2025-10-08
End date
2026-02-28
Keywords
Behavior, Finance & Microfinance
Additional Keywords
JEL code(s)
C70, C90, D44, D47, G34
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
We propose to study how contingent payment options affect the optimal selection of market formats using experimental methods. Our findings can have important implications for how payments are structured in cases such as mergers and acquisitions (M&A), sale of patents, or human capital allocation. Our experimental design focuses on outcomes under two distinct, and widely used formats: (i) a decentralized format, where the seller negotiates directly with a buyer, and (ii) a centralized format, where buyers compete in an auction for an asset. An experiment can clarify whether payment structure has implications for the preferred market format, and identify factors which affect these preferences.
External Link(s)

Registration Citation

Citation
Heggedal, Tom-Reiel, Jean Paul Rabanal and Olga Rud. 2025. "Auctions vs. Negotiations with Cash and Equity." AEA RCT Registry. October 13. https://doi.org/10.1257/rct.16957-1.0
Sponsors & Partners
Experimental Details

Interventions

Intervention(s)
Intervention Start Date
2025-10-08
Intervention End Date
2026-02-28

Primary Outcomes

Primary Outcomes (end points)
We are interested in studying contract prices under (i) negotiations and (ii) auctions relative to theoretical predictions. The contracts can be outcome contingent or fixed, depending on the treatments. We are also interested in measuring seller/buyer revenue, volume of contracts in each setting, market efficiency.

Our main hypotheses, based on theoretical predictions are:
H1: The seller's revenue under equity-auctions is larger than under cash-auctions.
H2: The seller's revenue under equity-negotiations is larger than under cash-negotiations.
H3: The seller's revenue under cash-auctions is larger than under cash-negotiations.
H4: The seller's revenue under equity-auctions is larger than under equity-negotiations.
H5: The seller's revenue under negotiations-equity is larger than or equal to under cash-auctions.


Primary Outcomes (explanation)

Secondary Outcomes

Secondary Outcomes (end points)
Secondary Outcomes (explanation)

Experimental Design

Experimental Design
This is a between subject, 2x2 design. The first level pertains to payment structure (contingent or fixed), while the second level pertains to market format (negotiation or auction).
Experimental Design Details
Not available
Randomization Method
Randomization is done by the program (role of the participant, and matching). Subjects are sorted into treatments randomly at session level.
Randomization Unit
Randomization unit is at the experimental session level.
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
About 200 subjects
Sample size: planned number of observations
Around 25 observations for bilateral treatments (2 of each) and 20 for auctions (2 of each). The bilateral market is composed of 1 seller and 1 buyer, while an auction has 1 seller and 2 buyers.
Sample size (or number of clusters) by treatment arms
We aim to have around 200 subjects, across 4 treatments. In bilateral markets the number of subjects will be 40 to 50 per treatment (based on 8 - 10 subjects per session) and in auctions it will be 45 to 60 (based on 9 to 12 subjects per session). We plan to drop the first 10 rounds of each session and focus our analyses on the remaining 20 rounds due to learning.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
For d-cohen of 1, we should have 17 observations (power 80).
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
BI Ethics Review Board
IRB Approval Date
2025-09-10
IRB Approval Number
SF-050
Analysis Plan