The net effect of advice on strategy-proof mechanisms: an experiment for the Vickrey auction

Abstract We conduct laboratory experiments for the multi-unit Vickrey auction with and without advice to subjects on strategy-proofness. The rate of truth-telling among stays at 20%, whereas increases 47% those who have received advice. By conducting similar pay-your-bid auction, which is not strategy-proof, we confirm that increase in due significantly net effect (i.e., beyond so-called experimenter demand effect). Moreover, find providing improves efficiency particularly early periods, when are less experienced. In general, tend overbid experiments. Our results indicate possibility simple decreases such overbidding by promoting a better understanding strategy-proofness auction. Strategy-proof mechanisms sometimes criticized because players often fail recognize benefit telling truth. However, our observations show introducing property helps them behave “correctly.”