Choosing a common project: Experimental evidence on the multibidding mechanism

David Pérez-Castrillo, Róbert F. Veszteg

Research output: Contribution to journalArticleResearchpeer-review

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. © 2006 Elsevier B.V. All rights reserved.
Original languageEnglish
Pages (from-to)394-411
JournalJournal of Economic Behavior and Organization
Volume63
DOIs
Publication statusPublished - 1 Jul 2007

Keywords

  • Experiments
  • Mechanisms
  • Uncertainty

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