Efficiency and synergy in a multi-unit auction with and without package bidding: An experimental study

► An efficiency trade-off in first-price auctions with package bidding is studied. ► It arises from the interplay between the threshold problem and bidder asymmetries. ► At high (low) synergies package bidding improves (hurts) efficiency. ► The efficiency trade-off is supported by the experimental data. ► Evidence is mixed on the prediction that package bidding reduces revenue.