Prices as Indicators of Scarcity: An Experimental Study of a Multistage Auction
The price mecanism is the primary means of information transfer in decentralized economic systems. High prices indicate high demand, whereas low prices indicate low demand. Thus prices are the signals for accelerating or slowing production. However, using sequential, multi-unit auctions, we show that the price mechanism fails to be beneficial for producers in every case. As an example we discuss auctions for future access rights to a network. We use experiments to show that the incentives for free-riding inherent in auctions for future access provide inaccurate signals for investment.
(This abstract was borrowed from another version of this item.)
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
|Date of creation:||2004|
|Date of revision:|
|Contact details of provider:|| Postal: Thelma C. Raley Hall, Boone, North Carolina 28608|
Web page: http://economics.appstate.edu/
More information through EDIRC
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.:
- Tanga McDaniel & Karsten Neuhoff, 2003.
"Use of Long-term Auctions for Network Investment,"
2003.29, Fondazione Eni Enrico Mattei.
- McAfee, R. Preston & Vincent, Daniel, 1997.
"Sequentially Optimal Auctions,"
Games and Economic Behavior,
Elsevier, vol. 18(2), pages 246-276, February.
- Urs Fischbacher, 2007. "z-Tree: Zurich toolbox for ready-made economic experiments," Experimental Economics, Springer;Economic Science Association, vol. 10(2), pages 171-178, June.
- Tibor Neugebauer & Paul Pezanis-Christou, 2003.
"Bidding at Sequential First-Price Auctions with(out) Supply Uncertainty: A Laboratory Analysis,"
UFAE and IAE Working Papers
558.03, Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC).
- Tibor Neugebauer & Paul Pezanis-Christou, 2003. "Bidding at Sequential First-Price Auctions with(out) Supply Uncertainty: a Laboratory Analysis," Working Papers 24, Barcelona Graduate School of Economics.
- Tanga McDaniel & Neuhoff, K., 2002. "Auctions to gas transmission access: The British experience," Cambridge Working Papers in Economics 0234, Faculty of Economics, University of Cambridge.
When requesting a correction, please mention this item's handle: RePEc:apl:wpaper:04-18. 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: (O. Ashton Morgan)
If references are entirely missing, you can add them using this form.