Theory and misbehavior in first-price auctions: comment
Article Abstract:
Glenn Harrison's 1989 study on first-price private-value auctions claimed that the results of James Cox, Vernon Smith and James Walker were not well supported. Harrison overstated his position when he claimed that it was more appropriate to assess subject behavior in expected payoff space. Harrison was correct in stating that the cost of deviations was a key research tool for identifying when researchers lost control over the incentives of subjects.
Publication Name: American Economic Review
Subject: Economics
ISSN: 0002-8282
Year: 1992
User Contributions:
Comment about this article or add new information about this topic:
Theory and misbehavior of first-price auctions: comment
Article Abstract:
Controversy arose among experimental economists over the methodology of Glenn Harrison's 1989 research on first-price sealed-bid auctions, which criticized the research of James Cox, Vernon Smith and James Walker. Harrison's analysis of the researchers had two shortcomings. Harrison's 'payoff metric' theories could not explain overbidding, and Harrison's statistical analyses could obscure several large losses under small losses.
Publication Name: American Economic Review
Subject: Economics
ISSN: 0002-8282
Year: 1992
User Contributions:
Comment about this article or add new information about this topic:
Theory and misbehavior of first-price auctions: comment
Article Abstract:
Glenn Harrison's 1989 assessment of a study on first-price auctions was based on the assumption that it would be more appropriate to test theories about bidding behavior with monetary-payoff data instead of bid data. Harrison's metric approach to evaluating behavioral theories with payoff data did not offer useful heuristics for the research because it was not able to measure forgone payoffs in an informative manner.
Publication Name: American Economic Review
Subject: Economics
ISSN: 0002-8282
Year: 1992
User Contributions:
Comment about this article or add new information about this topic:
- Abstracts: Monetary and fiscal remedies for deflation. Dividend taxes and firm valuation: new evidence. Capital-gains realizations of the rich and sophisticated
- Abstracts: Toys and Games: Distribution. Toys and Games: Advertising and Promotion
- Abstracts: Real effects of academic research: comment. R&D spillovers and the geography of innovation and production. Company-scientist locational links: the case of biotechnology
- Abstracts: Participation and productivity: a comparison of worker cooperatives and conventional firms in the plywood industry
- Abstracts: Insurance, adverse selection, and cream-skimming. Optimal capital structure in agency relationships. Incentives for conservation and quality-improvement by public utilities