Eliciting Reservation Prices: Becker-DeGroot-Marschak Mechanisms vs. Markets
The Becker-DeGroot-Marschak mechanism is used in experimental economies as an incentive-compatible procedure for eliciting reservation prices. It is found here, where seller prices are elicited, that the mechanism is sensitive to the choice of upper bound of the randomly generated buyout prices. Hence, the mechanism cannot be generally incentive compatible in practice. Two ways to specify the upper bound are identified which make the Becker-DeGroot-Marschak mechanism yield mean seller prices that do not differ from those generated in an incentive-compatible market. The experimental market used here is designed so that traders are unable to influence transaction prices, even when the market is small. Copyright 1997 by Royal Economic Society.
Volume (Year): 107 (1997)
Issue (Month): 443 (July)
|Contact details of provider:|| Postal: 2 Dean Trench Street, Westminster, SW1P 3HE|
Phone: +44 20 3137 6301
Web page: http://www.res.org.uk/
More information through EDIRC
|Order Information:||Web: http://www.blackwellpublishers.co.uk/asp/journal.asp?ref=0013-0133|
When requesting a correction, please mention this item's handle: RePEc:ecj:econjl:v:107:y:1997:i:443:p:1079-89. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing)or (Christopher F. Baum)
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.