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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.

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  • 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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    3. Daniel Rondeau & Christian A. Vossler, 2024. "Incentive compatibility and respondent beliefs: Consequentiality and game form," Working Papers 2024-02, University of Tennessee, Department of Economics.
    4. Maximilian Spath, 2023. "The qualitative accuracy of the Becker-DeGroot-Marshak method," Papers 2302.04055, arXiv.org.
    5. Chen, Yvonne Jie & Dutz, Deniz & Li, Li & Moon, Sarah & Vytlacil, Edward & Zhong, Songfa, 2024. "Eliciting willingness-to-pay to decompose beliefs and preferences that determine selection into competition in lab experiments," Journal of Econometrics, Elsevier, vol. 243(1).
    6. Grabiszewski, Konrad & Horenstein, Alex, 2025. "Understanding dynamic interactions," Games and Economic Behavior, Elsevier, vol. 149(C), pages 96-111.
    7. Koppel, Lina & Andersson, David & Johannesson, Magnus & Strømland, Eirik & Tinghög, Gustav, 2025. "Comprehension in economic games," Journal of Economic Behavior & Organization, Elsevier, vol. 234(C).
    8. Jacques, Phendy & Azima, Stevens & Doyon, Maurice, 2025. "How to incentivize peanut producers to adopt post-harvest aflatoxin control measures: A field experiment in Haiti," Food Policy, Elsevier, vol. 130(C).
    9. Drichoutis, Andreas C. & Nayga, Rodolfo M., 2022. "Game form recognition in preference elicitation, cognitive abilities, and cognitive load," Journal of Economic Behavior & Organization, Elsevier, vol. 193(C), pages 49-65.
    10. Martin, Daniel & Muñoz-Rodriguez, Edwin, 2022. "Cognitive costs and misperceived incentives: Evidence from the BDM mechanism," European Economic Review, Elsevier, vol. 148(C).

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    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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