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

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Listed:
  • Takehito Masuda
  • Toyotaka Sakai
  • Shigehiro Serizawa
  • Takuma Wakayama

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.”

Suggested Citation

  • Takehito Masuda & Toyotaka Sakai & Shigehiro Serizawa & Takuma Wakayama, 2019. "A Strategy-Proof Mechanism Should Be Announced to Be Strategy-Proof: An Experiment for the Vickrey Auction," ISER Discussion Paper 1048, Institute of Social and Economic Research, The University of Osaka.
    • Handle: RePEc:dpr:wpaper:1048
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    References listed on IDEAS

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