The Simultaneous, Ascending Auction: Dynamics of Price Adjustment in Experiments and in the U.K. 3G Spectrum Auction

In this paper we develop a model of the behavior of bidders in simultaneous ascending auctions based on two principles: principle of surplus maximization and the principle of bid minimization. These principles lead to models of both price dynamics and equilibration, leading to disequilibrium structural equations that can be used for estimating bidder values. The intention behind the development of this methodology is to provide an auctioneer a method of extracting information during an auction about possible closing prices. We first benchmark the performance of the model with data from experimental auctions and then apply it to the U.K. UMTS or Third Generation Mobile auction

Costly Offers and the Equilibration Properties of the Multiple Unit Double Auction Under Conditions of Unpredictable Shifts of Demand and Supply

The paper reports on the behavior of markets in which a transactions cost is imposed in the form of a tax on bids and asks that are tendered in the market. That is, in the markets studied communication with the other side of the market was costly. The markets were nonstationary in the sense that market demand and market supply shifted unpredictably each period and the markets were organized by the computerized Multiple Unit Double Auction. The results are as follow. (1) A market equilibration process is observed across the periods of nonstationary markets. (2) The imposition of the cost on offers did not negate the tendency toward market equilibration but the price discovery process was "incomplete" relative to the free offer case. (3) Price equilibration with the offer cost was slower and efficiencies were reduced

Committee Decisions under Alternative Procedural Rules: An Experimental Study Applying a New Nonmonetary Method of Preference Inducement

Committees operating with simple majority rule procedures and with closed rule procedures are studied. A new method (the duplicate method) was used to induce preferences. The results of the control experiments compare favorably to those for which monetary incentives have been used. In all cases the core is a relatively accurate model of committee choices

Preference purification and the inner rational agent:A critique of the conventional wisdom of behavioural welfare economics

Neoclassical economics assumes that individuals have stable and context-independent preferences, and uses preference-satisfaction as a normative criterion. By calling this assumption into question, behavioural findings cause fundamental problems for normative economics. A common response to these problems is to treat deviations from conventional rational-choice theory as mistakes, and to try to reconstruct the preferences that individuals would have acted on, had they reasoned correctly. We argue that this preference purification approach implicitly uses a dualistic model of the human being, in which an inner rational agent is trapped in an outer psychological shell. This model is psychologically and philosophically problematic

Committee Decisions under Alternative Procedural Rules: An Experimental Study Applying a New Nonmonetary Method of Preference Inducement

Committees operating with simple majority rule procedures and with closed rule procedures are studied. A new method (the duplicate method) was used to induce preferences. The results of the control experiments compare favorably to those for which monetary incentives have been used. In all cases the core is a relatively accurate model of committee choices