Implementing efficient multi-object auction institutions: An experimental study of the performance of boundedly rational agents
AbstractWe study three alternative implementations of the Vickrey multi-unit demand auction: Vickrey's original static sealed-bid auction and two dynamic/Ausubel auctions, with and without public dropout information reported during the auction. Although implemented by a weaker solution concept, behavior in the dynamic Vickrey auction with the public dropout information comes significantly closer to the theoretical prediction of sincere bidding, bidding one's valuations, than either the static Vickrey auction or the dynamic auction without dropout information. This suggests a possible tradeoff between the simplicity and transparency of a mechanism and the strength of its solution concept when agents are still learning and/or when players are not fully rational. Drawing on results from related single-unit and multi-unit demand auctions, and the results of a new single-unit demand auction experiment, we provide important insights into the behavioral mechanism underlying the superior performance of the Ausubel auction with feedback information.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Elsevier in its journal Games and Economic Behavior.
Volume (Year): 66 (2009)
Issue (Month): 1 (May)
Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/622836
Multi-unit auctions Static Vickrey auction Dynamic Vickrey (Ausubel) auction Mechanism design Implementation;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Andreoni, James & Che, Yeon-Koo & Kim, Jinwoo, 2007.
"Asymmetric information about rivals' types in standard auctions: An experiment,"
Games and Economic Behavior,
Elsevier, vol. 59(2), pages 240-259, May.
- James Andreoni & Yeon-Koo Che & Jinwoo Kim, 2006. "Asymmetric information about rivals' types in standard auctions: An experiment," Discussion Papers 0506-27, Columbia University, Department of Economics.
- James Andreoni & Yeon-Koo Che & Jinwoo Kim, 2005. "Asymmetric Information about Rivals’ Types in Standard Auctions: An Experiment," Levine's Bibliography 666156000000000474, UCLA Department of Economics.
- Andreoni,J. & Che,Y.-K. & Kim,J., 2006. "Asymmetric information about rivals' types in standard auctions : an experiment," Working papers 6, Wisconsin Madison - Social Systems.
- James Andreoni & Yeon-Koo Che & Jinwoo Kim, 2006. "Asymmetric Information about Rivals’ Types in Standard Auctions: An Experiment," Levine's Bibliography 321307000000000293, UCLA Department of Economics.
- Manelli, Alejandro M. & Sefton, Martin & Wilner, Benjamin S., 2006.
"Multi-unit auctions: A comparison of static and dynamic mechanisms,"
Journal of Economic Behavior & Organization,
Elsevier, vol. 61(2), pages 304-323, October.
- Alejandro Manelli & Martin Sefton & Benjamin Wilner, . "Multi-Unit Auctions: A Comparison of Static and Dynamic Mechanisms," Working Papers 2132867, Department of Economics, W. P. Carey School of Business, Arizona State University.
- Simon, Leo K & Stinchcombe, Maxwell B, 1989.
"Extensive Form Games in Continuous Time: Pure Strategies,"
Econometric Society, vol. 57(5), pages 1171-1214, September.
- Leo K. Simon and Maxwell B. Stinchcombe., 1987. "Extensive Form Games in Continuous Time: Pure Strategies," Economics Working Papers 8746, University of California at Berkeley.
- Simon, Leo K. & Stinchcombe, Maxwell B., 1987. "Extensive From Games in Continuous Time: Pure Strategies," Department of Economics, Working Paper Series qt03x115sh, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
- Ronald Harstad, 2000. "Dominant Strategy Adoption and Bidders' Experience with Pricing Rules," Experimental Economics, Springer, vol. 3(3), pages 261-280, December.
- Levin, Dan & Kagel, John H & Richard, Jean-Francois, 1996. "Revenue Effects and Information Processing in English Common Value Auctions," American Economic Review, American Economic Association, vol. 86(3), pages 442-60, June.
- Kagel, John H & Harstad, Ronald M & Levin, Dan, 1987. "Information Impact and Allocation Rules in Auctions with Affiliated Private Values: A Laboratory Study," Econometrica, Econometric Society, vol. 55(6), pages 1275-1304, November.
- R. Isaac & Duncan James, 2000. "Robustness of the Incentive Compatible Combinatorial Auction," Experimental Economics, Springer, vol. 3(1), pages 31-53, June.
- John Kagel & Svetlana Pevnitskaya & Lixin Ye, 2007.
Springer, vol. 33(1), pages 103-119, October.
- Lixin Ye & John Kagel & Svetlana Pevnitska, 2004. "Survival Auctions," Econometric Society 2004 North American Winter Meetings 414, Econometric Society.
- William Vickrey, 1961. "Counterspeculation, Auctions, And Competitive Sealed Tenders," Journal of Finance, American Finance Association, vol. 16(1), pages 8-37, 03.
- Yan Chen & Fang-Fang Tang, 1998. "Learning and Incentive-Compatible Mechanisms for Public Goods Provision: An Experimental Study," Journal of Political Economy, University of Chicago Press, vol. 106(3), pages 633-662, June.
- Dirk Engelmann & Veronika Grimm, 2009.
"Bidding Behaviour in Multi-Unit Auctions - An Experimental Investigation,"
Royal Economic Society, vol. 119(537), pages 855-882, 04.
- Dirk Engelmann & Veronika Grimm, 2006. "Bidding Behavior in Multi-Unit Auctions - An Experimental Investigation," Working Paper Series in Economics 24, University of Cologne, Department of Economics.
- Kagel, John H. & Levin, Dan, 2005. "Multi-unit demand auctions with synergies: behavior in sealed-bid versus ascending-bid uniform-price auctions," Games and Economic Behavior, Elsevier, vol. 53(2), pages 170-207, November.
- Milgrom, Paul R & Weber, Robert J, 1982.
"A Theory of Auctions and Competitive Bidding,"
Econometric Society, vol. 50(5), pages 1089-1122, September.
- Healy, Paul J., 2006. "Learning dynamics for mechanism design: An experimental comparison of public goods mechanisms," Journal of Economic Theory, Elsevier, vol. 129(1), pages 114-149, July.
- Lawrence M. Ausubel, 2004. "An Efficient Ascending-Bid Auction for Multiple Objects," American Economic Review, American Economic Association, vol. 94(5), pages 1452-1475, December.
- David Porter & Roumen Vragov, 2006. "An experimental examination of demand reduction in multi-unit versions of the Uniform-price, Vickrey, and English auctions," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 27(6), pages 445-458.
- Theodore Turocy & Elizabeth Watson & Raymond Battalio, 2007. "Framing the first-price auction," Experimental Economics, Springer, vol. 10(1), pages 37-51, March.
- Kagel, John H & Levin, Dan, 2001. "Behavior in Multi-unit Demand Auctions: Experiments with Uniform Price and Dynamic Vickrey Auctions," Econometrica, Econometric Society, vol. 69(2), pages 413-54, March.
- repec:feb:framed:0052 is not listed on IDEAS
- Li Hao & Daniel Houser, 2012. "Belief elicitation in the presence of naïve respondents: An experimental study," Journal of Risk and Uncertainty, Springer, vol. 44(2), pages 161-180, April.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wendy Shamier).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.