A random nth-price auction

Shogren, Jason F.; Margolis, Michael; Koo, Cannon; List, John A.

doi:10.1016/s0167-2681(01)00165-2

Cited by 239 publications

(188 citation statements)

References 23 publications

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“…Econometric results are given in Table 2. Based on the estimated parameters of the bidding function, we can test for perfect demand revealing bids for each treatment by considering H 0 : {β = 1, α = 0, φ t = 0 ∀t} (see, for instance, Shogren et al, 2001) We reject perfect demand revealing bids for both treatments. This indicates that for both hypothetical and real treatments, there is some room for cheap talk to impact on hypothetical bidding behavior in an IV second price auction.…”

Section: Resultsmentioning

confidence: 99%

Social Psychology and Environmental Economics: A New Look at ex ante Corrections of Biased Preference Evaluation

Jacquemet

James

Luchini

et al. 2011

Environ Resource Econ

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Environmental economics is now a long standing field of research; much has been learned on how environmental policy can use incentives to drive individual behaviors. Among the many examples, preference elicitation is the most discussed case in which incentives fail to accurately implement efficient behavior. Using this as our motivating example, herein we explore the cross-fertilization between environmental economics and social psychology . We first review how the lessons drawn from social psychology helped address the hypothetical bias issue. We then turn to the future of this process by focusing on how cheap talk scripts influence preference elicitation. Our experimental results shows CT scripts work through persuasion -i.e. changes mind, but poorly changes actions. In that sense, preference elicitation still lacks a way of making communication binding -i.e. a way to alter intrinsic motivation of subjects to behave truthfully. Keywords:Social psychology, Commitment, Persuasive communication, Preference elicitation JEL Classification: C9; H4; Q5 Résumé L'économie de l'environnement a depuis longtemps permis de mettre en évidence les moyens par lesquels les politiques publiques menées dans ce domaine peuvent s'appuyer sur les incitations pour orienter les comportements. Les méthodes de révélation des préférences restent cependant l'un des exemples les plus étudiés de défaillance des incitations. En s'appuyant sur cette illustration, cet article propose une synthèse des progrès réalisés en économie de l'environnement grâce à l'intégration des résultats issus de la psychologie sociale. La première partie de l'article propose une revue des méthodes issues de cette discipline et destinées à corriger le biais hypothétique. La seconde partie s'appuie sur une expérience en laboratoire pour évaluer la capacité des scripts de cheap talk à résoudre ce problème. Les comportements observés montrent que les scripts de cheap talk influencent les comportements par un effet de persuasion -i.e. agissent sur les intentions, mais n'affectent que faiblement les actions. En ce sens, les méthodes de révélation des préférences souffrent toujours du manque d'une méthode de communication engageante -i.e. permettant d'affecter la motivation intrinsèque des individus à révéler leurs préférences vraies.

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Section: Resultsmentioning

confidence: 99%

Social Psychology and Environmental Economics: A New Look at ex ante Corrections of Biased Preference Evaluation

Jacquemet

James

Luchini

et al. 2011

Environ Resource Econ

Self Cite

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“…The random nth-price auction was formally introduced by Shogren, Maroglis, Koo, & List (2001) and combines the features of the Vickrey second-price auction, which encourages competition amongst bidders, and the Becker-DeGroot-Marschak mechanism, which gives all bidders a chance to win the auction (Lusk & Shogren, 2007).…”

Section: Random Nth Price Auctionmentioning

confidence: 99%

“…The randomness of the price ensures that all bidders are engaged, while the endogenous price guarantees that the payment (market-clearing) price is in line with the value that the consumer attaches to the product (private value) of the bidders (Shogren, Maroglis, Koo, & List, 2001) The standard random nth-price auction works as follows: Each participant would offer a sealed bid for the auctioned product. The monitor collects the bids and sorts them from the highest to the lowest bid.…”

Section: Random Nth Price Auctionmentioning

confidence: 99%

Determining South African consumers’ willingness to pay for certified Karoo lamb: An application of an experimental auction

Zyl

Vermeulen

Kirsten

2013

Agrekon

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“…No other study, however, has examined the bid affiliation issue in random nth price auction. Shogren et al (2001a), Parkhurst et al (2004) and Lusk and Rousu (2006) used the random nth price auction as a demandrevealing mechanism that can potentially substitute for the second price auction. In this paper, the bid affiliation issue in the random nth price auction was assessed, mainly, for two reasons.…”

Section: Introductionmentioning

confidence: 99%

“…The n-1 highest bidders are declared winners of the auction and the auctioneer sells them one unit of the auctioned good at the nth price. For example if n = 4, the three highest bidders each will buy one unit of the auctioned good priced at the fourth highest bid (Shogren et al, 2001a). After informing the subjects about how the random nth auction works, a practical example was then carried out with the auction of a 330 mL bottle of water.…”

Section: Introductionmentioning

confidence: 99%

Short communication. Bid affiliation in repeated random nth price auction

Akaichi¹,

Gil

Nayga³

1970

Span. j. agric. res.

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In most experimental auctions, it is a common practice to carry out several bidding rounds for the same product and to post the winning price at the end of each round. This practice can lead to an affiliation of participants’ bids and biased value estimates if bids between subjects are inter-dependent. In this paper, the effect of posted prices on bidders’ willingness to pay for a good using a random nth price auction is examined. The auctioned good was one kilogram of the Protected Designation Origin (PDO) ‘Mongeta del Ganxet Vallés Maresme’ white bean, stored in a cloth bag. In general, results indicate that bid affiliation is not an issue in the random nth price mechanism. However, consumers’ experience of the auctioned product matters. Experienced subjects are positively influenced by high posted prices while inexperienced subjects tend to decrease their bids when the posted price is low. Interestingly, low posted prices do not influence bids of experienced subjects and high posted prices do not influence bids of inexperienced subjects.

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A random nth-price auction

Cited by 239 publications

References 23 publications

Social Psychology and Environmental Economics: A New Look at ex ante Corrections of Biased Preference Evaluation

Social Psychology and Environmental Economics: A New Look at ex ante Corrections of Biased Preference Evaluation

Determining South African consumers’ willingness to pay for certified Karoo lamb: An application of an experimental auction

Short communication. Bid affiliation in repeated random nth price auction

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