Artikel
Obviousness around the clock
Li (Am Econ Rev 107(11):3257–3287, 2017) introduces a theoretical notion of obviousness of a dominant strategy, to be used as a refinement in mechanism design. This notion is supported by experimental evidence that bidding is closer to dominance in the dynamic ascending-clock auction than the static second-price auction (private values), noting that dominance is theoretically obvious in the former but not the latter. We replicate his experimental study and add three intermediate auction formats that decompose the designs' differences to quantify the cumulative effects of (1) simply seeing an ascending-price clock (after bid submission), (2) bidding dynamically on the clock, and (3) getting (theoretically irrelevant) drop-out information about other bidders. The theory predicts dominance to become obvious through (2), dynamic bidding. We find no significant behavioral effect of (2), however, while the feedback effects (1) and (3) are highly significant. We conclude that behavioral differences between second-price and ascending-clock auctions offer rather limited support for the theory of obviousness and that framing has surprisingly large potential in mechanism design.
- Language
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Englisch
- Bibliographic citation
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Journal: Experimental Economics ; ISSN: 1573-6938 ; Volume: 25 ; Year: 2021 ; Issue: 2 ; Pages: 483-513 ; New York, NY: Springer US
- Classification
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Wirtschaft
Design of Experiments: Laboratory, Individual
Auctions
Asymmetric and Private Information; Mechanism Design
- Subject
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Experiments
Private value auctions
Strategy-proofness
Obviousness
- Event
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Geistige Schöpfung
- (who)
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Breitmoser, Yves
Schweighofer-Kodritsch, Sebastian
- Event
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Veröffentlichung
- (who)
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Springer US
- (where)
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New York, NY
- (when)
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2021
- DOI
-
doi:10.1007/s10683-021-09720-z
- Last update
-
10.03.2025, 11:43 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Artikel
Associated
- Breitmoser, Yves
- Schweighofer-Kodritsch, Sebastian
- Springer US
Time of origin
- 2021
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