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The net effect of advice on strategy-proof mechanisms: An experiment for the Vickrey auction

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  • Takehito Masuda
  • Ryo Mikami
  • Toyotaka Sakai
  • Shigehiro Serizawa
  • Takuma Wakayama

Abstract

We conduct laboratory experiments for the multi-unit Vickrey auction with and without advice to subjects on strategy-proofness. The rate of truth-telling among the subjects without advice stays at 20%, whereas the rate increases to 47% among those who have received advice. By conducting similar experiments for the pay-your-bid auction, which is not strategy-proof, we confirm that the increase in truth-telling is due significantly to the net advice effect (i.e., the effect beyond the so-called experimenter demand effect). Moreover, we find that providing advice improves efficiency in the Vickrey auction, particularly in the early periods, when the subjects are less experienced. In general, subjects tend to overbid in Vickrey auction experiments. Our results indicate the possibility

Suggested Citation

  • Takehito Masuda & Ryo Mikami & Toyotaka Sakai & Shigehiro Serizawa & Takuma Wakayama, 2020. "The net effect of advice on strategy-proof mechanisms: An experiment for the Vickrey auction," ISER Discussion Paper 1109r, Institute of Social and Economic Research, The University of Osaka, revised May 2021.
    • Handle: RePEc:dpr:wpaper:1109r
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