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Teaching auction strategy using experiments administered via the internet

Asker, John, Grosskopf, Brit, McKinney, C. Nicholas, Niederle, Muriel, Roth, Alvin E. and Weizsacker, Georg (2004) Teaching auction strategy using experiments administered via the internet. Journal of Economic Education, 35 (4). pp. 330-342. ISSN 0022-0485

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Abstract

The authors present an experimental design used to teach concepts in the economics of auctions and implications for e-Business procurement. The experiment is easily administered and can be adapted to many different treatments. The chief innovation is that it doce not require the use of a lab or class time. Instead, the design can be implemented on any of the many Web-based auction sites (we use Yahoo!). This design has been used to demonstrate how information is transmitted by bids in an auction and how this can make it difficult for well-informed bidders to profit from their information, leading to disincentives tor relatively informed bidders to enter an auction. Consequently, an auction may sometimes be an ineffective mechanism for procurement. compared with other options. The auction experiment shows how information can dramatically affect market outcomes and bidder incentives.

Item Type: Article
Official URL: http://www.heldref.org/jecone.php
Additional Information: © 2004 Heldref Publications
Library of Congress subject classification: H Social Sciences > HB Economic Theory
Journal of Economic Literature Classification System: A - General Economics and Teaching > A2 - Economics Education and Teaching of Economics
C - Mathematical and Quantitative Methods > C9 - Design of Experiments
D - Microeconomics > D4 - Market Structure and Pricing > D44 - Auctions
Sets: Collections > Economists Online
Departments > Economics
Rights: http://www.lse.ac.uk/library/usingTheLibrary/academicSupport/OA/depositYourResearch.aspx
Date Deposited: 20 May 2008 16:53
URL: http://eprints.lse.ac.uk/4942/

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