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Failure of the Becker–DeGroot–Marschak mechanism in inexperienced subjects: New tests of the game form misconception hypothesis

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  • Bull, Charles
  • Courty, Pascal
  • Doyon, Maurice
  • Rondeau, Daniel

Abstract

Cason and Plott (2014, hereafter CP) conclude that sub-optimal behavior in the (second price) Becker-DeGroot-Marschak mechanism (BDM) is consistent with the hypothesis that a significant proportion of subjects misconceive the BDM as a first price auction. We broadly replicate CP’s results, formalize a game form recognition theory for the analysis of treatment effects, and explore the robustness of CP’s conclusions across four treatments. We conclude that the pattern of misconception that explains the BDM data cannot simultaneously explain observed choices in closely related treatments.

Suggested Citation

  • Bull, Charles & Courty, Pascal & Doyon, Maurice & Rondeau, Daniel, 2019. "Failure of the Becker–DeGroot–Marschak mechanism in inexperienced subjects: New tests of the game form misconception hypothesis," Journal of Economic Behavior & Organization, Elsevier, vol. 159(C), pages 235-253.
    • Handle: RePEc:eee:jeborg:v:159:y:2019:i:c:p:235-253
    DOI: 10.1016/j.jebo.2019.01.003
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    Keywords

    Experiment; Game form recognition; Game form misconception; Mistake; Becker–DeGroot–Marschak; Preference elicitation;

    JEL classification:

    • C8 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs
    • C9 - Mathematical and Quantitative Methods - - Design of Experiments

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