Private Valuation of a Public Good in Three Auction Mechanisms
AbstractWe evaluate the impact of three auction mechanismsthe Becker-DeGroot-Marschak (BDM) mechanism, the second-price auction (SPA), and the random nth-price auction (NPA)in the measurement of private willingness-to-pay and willingness-to-accept for a pure public good. Our results show that the endowment effect is lower with the BDM mechanism. In this market mechanism, the effect disappears after a few repetitions. Yet, on a logarithmic scale, the random nth-price auction yields the highest speed of convergence towards equality of welfare indices. We also observe that subjects value public goods in reference to their private subjective benefit derived from their public funding.
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Bibliographic InfoArticle provided by De Gruyter in its journal Journal of Benefit-Cost Analysis.
Volume (Year): 2 (2011)
Issue (Month): 2 (April)
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Web page: http://www.degruyter.com
Other versions of this item:
- Arnaud Dragicevic & David Ettinger, 2011. "Private Valuation of a Public Good in Three Auction Mechanisms," Post-Print hal-00704708, HAL.
- Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
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