Choosing a common project

Experimental evidence on the multibidding mechanism

David Pérez-Castrillo, Robert Ferenc Veszteg

Research output: Contribution to journalArticle

8 Citations (Scopus)

Abstract

[Pérez-Castrillo, D., Wettstein, D., 2002. Choosing wisely: a multibidding approach. American Economic Review 5, 1577-1587.] and [Veszteg, R.F., 2004. Multibidding game under uncertainty. Working paper 14/04. Universidad de Navarra.] propose the use of a multibidding mechanism for situations where agents have to choose a common project. Examples are decisions involving public goods (or public "bads"). We report experimental results that test the practical tractability and effectiveness of multibidding mechanisms in environments where agents hold private information concerning their valuation of the projects. The mechanism performed quite well in the laboratory, providing the ex post efficient outcome in roughly three quarters of the cases across the treatments; moreover, the largest part of the subject pool formed their bids according to theoretical bidding behavior.

Original languageEnglish
Pages (from-to)394-411
Number of pages18
JournalJournal of Economic Behavior and Organization
Volume63
Issue number3
DOIs
Publication statusPublished - 2007 Jul
Externally publishedYes

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Private information
Economics
Bidding behavior
Bid
Uncertainty

Keywords

  • Experiments
  • Mechanisms
  • Uncertainty

ASJC Scopus subject areas

  • Organizational Behavior and Human Resource Management
  • Economics and Econometrics

Cite this

Choosing a common project : Experimental evidence on the multibidding mechanism. / Pérez-Castrillo, David; Veszteg, Robert Ferenc.

In: Journal of Economic Behavior and Organization, Vol. 63, No. 3, 07.2007, p. 394-411.

Research output: Contribution to journalArticle

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