Naturally Occurring Markets and Exogenous Laboratory Experiments: A Case Study of the Winner's Curse
We 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).
If 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.
Volume (Year): 118 (2008)
Issue (Month): 528 (04)
|Contact details of provider:|| Postal: |
Phone: +44 1334 462479
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|
References listed on IDEAS
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.:
- John List, 2001.
"Do explicit warnings eliminate the hypothetical bias in elicitation procedures? Evidence from field auctions for sportscards,"
Framed Field Experiments
00163, The Field Experiments Website.
- John A. List, 2001. "Do Explicit Warnings Eliminate the Hypothetical Bias in Elicitation Procedures? Evidence from Field Auctions for Sportscards," American Economic Review, American Economic Association, vol. 91(5), pages 1498-1507, December.
- Paul Slovic & Sarah Lichtenstein, 1973. "Response-induced reversals of preference in gambling: An extended replication in las vegas," Framed Field Experiments 00169, The Field Experiments Website.
- Douglas Dyer & John H. Kagel, 1996.
"Bidding in Common Value Auctions: How the Commercial Construction Industry Corrects for the Winner's Curse,"
INFORMS, vol. 42(10), pages 1463-1475, October.
- Douglas Dyer & John Kagel, 1996. "Bidding in common value auctions: How the commercial construction industry corrects for the winner's curse," Framed Field Experiments 00144, The Field Experiments Website.
- Plott, Charles R. & Sunder, Shyam., .
"Efficiency of Experimental Security Markets with Insider Information: An Application of Rational Expectations Models,"
331, California Institute of Technology, Division of the Humanities and Social Sciences.
- Plott, Charles R & Sunder, Shyam, 1982. "Efficiency of Experimental Security Markets with Insider Information: An Application of Rational-Expectations Models," Journal of Political Economy, University of Chicago Press, vol. 90(4), pages 663-98, August.
- Milgrom, Paul R & Weber, Robert J, 1982.
"A Theory of Auctions and Competitive Bidding,"
Econometric Society, vol. 50(5), pages 1089-1122, September.
- 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.
- Bohm, Peter & Lind, Hans, 1993. "Preference reversal, real-world lotteries, and lottery-interested subjects," Journal of Economic Behavior & Organization, Elsevier, vol. 22(3), pages 327-348, December.
- David Reiley & John List, 2008.
Artefactual Field Experiments
00091, The Field Experiments Website.
- Dyer, D. & Kagel, J.H. & Levin, D., 1988.
"A Comparison Of Naive And Experienced Bidders In Common Value Offer Auctions A Laboratory Analysis,"
11, Houston - Department of Economics.
- Dyer, Douglas & Kagel, John H & Levin, Dan, 1989. "A Comparison of Naive and Experienced Bidders in Common Value Offer Auctions: A Laboratory Analysis," Economic Journal, Royal Economic Society, vol. 99(394), pages 108-15, March.
- John H. Kagel & Colin M. Campbell & Dan Levin, 1999.
"The Winner's Curse and Public Information in Common Value Auctions: Reply,"
American Economic Review,
American Economic Association, vol. 89(1), pages 325-334, March.
- Kagel, John H & Levin, Dan, 1991. "The Winner's Curse and Public Information in Common Value Auctions: Reply," American Economic Review, American Economic Association, vol. 81(1), pages 362-69, March.
- Robert B. Wilson, 1967. "Competitive Bidding with Asymmetric Information," Management Science, INFORMS, vol. 13(11), pages 816-820, July.
- David Lucking-Reiley & John A. List, 2000. "Demand Reduction in Multiunit Auctions: Evidence from a Sportscard Field Experiment," American Economic Review, American Economic Association, vol. 90(4), pages 961-972, September.
- John H. Kagel & Dan Levin, 1999. "Common Value Auctions with Insider Information," Econometrica, Econometric Society, vol. 67(5), pages 1219-1238, September.
- Laskowski, Michael C. & Slonim, Robert L., 1999. "An Asymptotic Solution for Sealed Bid Common-Value Auctions with Bidders Having Asymmetric Information," Games and Economic Behavior, Elsevier, vol. 28(2), pages 238-255, August.
- Engelbrecht-Wiggans, Richard & Milgrom, Paul R. & Weber, Robert J., 1983. "Competitive bidding and proprietary information," Journal of Mathematical Economics, Elsevier, vol. 11(2), pages 161-169, April.
- Hans Lind & Peter Bohm, 1993. "Preference reversal, real-world lotteries, and lottery-interested subjects," Framed Field Experiments 00131, The Field Experiments Website.
- 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.
- Friedman, Daniel & Harrison, Glenn W & Salmon, Jon W, 1984. "The Informational Efficiency of Experimental Asset Markets," Journal of Political Economy, University of Chicago Press, vol. 92(3), pages 349-408, June.
- Harrison, Glenn W, 1990. "Risk Attitudes in First-Price Auction Experiments: A Bayesian Analysis," The Review of Economics and Statistics, MIT Press, vol. 72(3), pages 541-46, August.
- Hendricks, Kenneth & Porter, Robert H, 1988. "An Empirical Study of an Auction with Asymmetric Information," American Economic Review, American Economic Association, vol. 78(5), pages 865-83, December.
When requesting a correction, please mention this item's handle: RePEc:ecj:econjl:v:118:y:2008:i:528:p:822-843. 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.