Minority vs. majority: An experimental study of standardized bids

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Abstract Due to its simplicity the plurality voting system is frequently used to choose a common representative or project. Nevertheless it may fail to provide a socially efficient decision as a majority can outvote any minority even if the majority's gain does not compensate the loss suffered by the minority. In this paper we propose and study a simple mechanism that allows voters to reveal more information about their preferences over the candidates. According to the standardized bids mechanism voters report a bid for all the available projects. Terms of use: Documents inStandardization ensures the existence of equilibrium, and delivers incentives to overcome the problem of positive and negative exaggeration. Our experimental results show that the standardized bids mechanism performed well in the laboratory as it chose the efficient project in almost three quarters of the cases, and induced truthful reports of project rankings in approximately 90% of the cases. For a reference, we also present experimental results for the plurality voting scheme.

The BCD of response time analysis in experimental economics

“…increases the acceptance rate of low offers if subjects had not explicitly or implicitly expressed negative emotions Ultimatum game Matthey and Regner ( 2011 ) en Cognitive dissonance RT is longer in social dilemmas where cognitive dissonance plays a role—in this case, when subjects can choose whether to observe the other player’s payoffs or not Dictator game Suter and Hertwig ( 2011 ) tp Dual-system, cognitive effort Time pressure reduces cognitive control over moral instincts, thereby increasing the probability of deontological responses Moral dilemmas Gneezy et al. ( 2010 ) en Cognitive effort RT is lower in winning positions than losing positions, also RT increases the more steps required in backward analysis of the game Race game Pintér and Veszteg ( 2010 ) en Dual-system No relationship between RT and truthfulness Voting schemes Ibanez et al. ( 2009 ) tp Cognitive effort Time pressure resulted in less search (sub-optimal) in the short-run (but no long-term effect), RT declined with experience without a performance trade-off Bid/search task Kuo et al.…”

Linking Decisions with Standardization

“…3. Pintér and Veszteg (2010) report experimental evidence on the so-called standardized bids voting scheme that relies on the above-described idea. They observe that standardization is not problematic to explain to untrained experimental subjects and the adoption of the mechanism increases social efficiency.…”