An Experimental Analysis of an Envy-Free Auction
نویسندگان
چکیده
Economic concerns for equity have motivated game theorists to study envy-free mechanisms. Though not incentive compatible, these mechanisms implement in Nash equilibria efficient allocations at which no agent prefers the consumption of any other agent to their own. In experimental allocation decisions between two players, an envy-free first-price auction achieves similar efficiency and far greater no-envy than ultimatum bargaining. Both unsophisticated subject bidding and coordination failure are responsible for the departure from Nash equilibrium behavior in the envy-free auction, as bidding strategies vary greatly among subjects. Quantal response equilibrium and level! models can explain most of this subjects bidding behavior. JEL classification: D63, C72, C91
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