Measuring the impact of the information aggregation mechanisms: an experimental investigation

Moez Bennouri (), Henner Gimpel and Jacques Robert
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Henner Gimpel: KIT - Karlsruhe Institute of Technology = Karlsruher Institut für Technologie
Jacques Robert: HEC Montréal - HEC Montréal

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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: 2011-05
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Citations: View citations in EconPapers (5)

Published in Journal of Economic Behavior and Organization, 2011, Vol. 78 (n° 3), pp 302-318. ⟨10.1016/j.jebo.2011.01.016⟩

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Journal Article: Measuring the impact of information aggregation mechanisms: An experimental investigation (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00826235

DOI: 10.1016/j.jebo.2011.01.016

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