Naturally Occurring Markets and Exogenous Laboratory Experiments: A Case Study of the Winner's Curse
AbstractWe examine the relevance of experimental findings from laboratory settings that abstract from the field context of the task that theory purports to explain. Using common value auction theory as our guide, we identify naturally occurring settings in which one can test the theory. Experienced agents bidding in familiar roles do not fall prey to the winner's curse. Yet, experienced agents fall prey to the winner's curse when bidding in an unfamiliar role. We conclude that the theory predicts field behaviour well when one is able to identify naturally occurring field counterparts to the key theoretical conditions. Copyright � 2008 The Author(s).
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Bibliographic InfoArticle provided by Royal Economic Society in its journal The Economic Journal.
Volume (Year): 118 (2008)
Issue (Month): 528 (04)
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Other versions of this item:
- Glenn Harrison & John List, 2008. "Naturally occurring markets and exogenous laboratory experiments: A case study of the winner's curse," Framed Field Experiments 00266, The Field Experiments Website.
- Glenn W. Harrison & John A. List, 2007. "Naturally Occurring Markets and Exogenous Laboratory Experiments: A Case Study of the Winner's Curse," NBER Working Papers 13072, National Bureau of Economic Research, Inc.
- C90 - Mathematical and Quantitative Methods - - Design of Experiments - - - General
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
- D02 - Microeconomics - - General - - - Institutions: Design, Formation, and Operations
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- L0 - Industrial Organization - - General
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