The net effect of advice on strategy-proof mechanisms: An experiment for the Vickrey auction

Takehito Masuda, Ryo Mikami, Toyotaka Sakai, Shigehiro Serizawa and Takuma Wakayama

ISER Discussion Paper from Institute of Social and Economic Research, The University of Osaka

Abstract: We conduct laboratory experiments for the multi-unit Vickrey auction with and without advice to subjects on strategy-proofness. The rate of truth-telling among the subjects without advice stays at 20%, whereas the rate increases to 47% among those who have received advice. By conducting similar experiments for the pay-your-bid auction, which is not strategy-proof, we confirm that the increase in truth-telling is due significantly to the net advice effect (i.e., the effect beyond the so-called experimenter demand effect). Moreover, we find that providing advice improves efficiency in the Vickrey auction, particularly in the early periods, when the subjects are less experienced. In general, subjects tend to overbid in Vickrey auction experiments. Our results indicate the possibility

Date: 2020-12, Revised 2021-05
New Economics Papers: this item is included in nep-des and nep-exp
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