Behavioral efficiency II: A simple laboratory demonstration

Arbeitspapier

Laboratory experiments reporting on shortfalls from allocative efficiency of allocation mechanisms depend on the induced-values methodology, which cannot be extended to the field. Harstad [2011] proposes to observe efficiency of allocation mechanisms without knowing motivations via behavior in appropriately designed aftermarkets. This paper demonstrates the approach in a highly simplified economy: allocation of a single unit of an abstract commodity. In the context studied, second-price auctions are observed to yield significantly greater behavioral inefficiencies than first-price auctions, both in terms of frequency of behaviorally inefficient outcomes, and in terms of the expected size of gains from aftermarket trade missed by the auction itself. The design is shown to be field-ready.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ISER Discussion Paper ; No. 819

Classification and Topics

• Classification: Wirtschaft
• Subject: Marktmechanismus ; Allokationseffizienz ; Verhaltensökonomik ; Auktionstheorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Harstad, Ronald M.
• Event: Veröffentlichung
• (who): Osaka University, Institute of Social and Economic Research (ISER)
• (where): Osaka
• (when): 2011

Further information

• Handle: http://hdl.handle.net/10419/92577
• Last update: 10.03.2025, 11:42 AM CET