Choosing a common project: Experimental evidence on the multibidding mechanism

David Pérez-Castrillo, Róbert F. 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 1
Externally publishedYes

Keywords

  • Experiments
  • Mechanisms
  • Uncertainty

ASJC Scopus subject areas

  • Economics and Econometrics
  • Organizational Behavior and Human Resource Management

Fingerprint Dive into the research topics of 'Choosing a common project: Experimental evidence on the multibidding mechanism'. Together they form a unique fingerprint.

  • Cite this