Measuring the impact of information aggregation mechanisms: An experimental investigation

Moez Bennouri (), Henner Gimpel and Jacques Robert

Journal of Economic Behavior & Organization, 2011, vol. 78, issue 3, 302-318

Abstract: Abstract This paper measures the effectiveness of market-based and cheap-talk information aggregation. Both information aggregation mechanisms (IAMs) are frequently used prior to IPOs and sales of Treasury bonds - it is largely acknowledged that they provide agents with useful information for subsequent bidding. In a laboratory experiment, we study how information provided by IAMs interacts with private and public information and how agents integrate it in their strategic behavior in a multi-unit common-value uniform-price auction. In market-based IAMs, information gathering prevails and subsequent bidding shows that subjects acknowledge the precision of information. However, in cheap-talk IAMs, there is almost no transmitted information.

Keywords: Market; design; Information; aggregation; Cheap-talk; Auction; Initial; public; offering (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (5)

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Working Paper: Measuring the impact of the information aggregation mechanisms: an experimental investigation (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:78:y:2011:i:3:p:302-318

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