A Strategy-Proof Mechanism Should Be Announced to Be Strategy-Proof: An Experiment for the Vickrey Auction

Takehito Masuda, 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 Vickrey auction with and without an announcement on strategy-proofness to subjects. Although the rate of truth-telling among the subjects stays at 20% without the announcement, it increases to 47% with the announcement. Moreover, by conducting experiments for the pay-your-bid auction, which is not strategy-proof, with and without advice, we find that our experimental results are not attributed to so-called experimenter demand effects. Strategy-proof mechanisms are sometimes criticized because players often fail to find the benefit of truth-telling, but our observations tell that introducing an educative announcement helps them behave “correctly.”

Date: 2019-01
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Persistent link: https://EconPapers.repec.org/RePEc:dpr:wpaper:1048

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