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Motivated by both prior experimental work and by field observations, we consider the performance of two different sealed bid versions of the silent auction. These are important institutional alternatives to the more familiar ascending price silent auction. In a new series of laboratory experiments, we investigate the effects of the different institutions both on aggregate efficiency and upon aggregate revenue generation.
Traditional auction theory assumes that bidders possess values defined solely on the auctioned object. There may, however, be cases in which bidders possess preferences…
Traditional auction theory assumes that bidders possess values defined solely on the auctioned object. There may, however, be cases in which bidders possess preferences over the revenue achieved by the auctioneer. We present here a comprehensive framework of price-preference valuations, unifying several phenomena ranging from preference for charitable giving to shill bidding. We compare expected efficiency and revenue of first- and second-price auctions for some specific cases of key interest. We also incorporate heterogeneous bidder preferences and examine the effects of mis-specified beliefs and show that both are crucial for understanding these situations.
Purpose – The purpose of this chapter is to serve as an introduction and motivation for Volume 13 of Research in Experimental Economics. In many cases, these introductory…
Purpose – The purpose of this chapter is to serve as an introduction and motivation for Volume 13 of Research in Experimental Economics. In many cases, these introductory chapters are prefaces, limited to giving a roadmap of the volume and brief discussions of the chapters and why they were included. However, in some cases a more extensive discussion of the state of the literature and discipline can be useful. We have the same goal for this chapter.
Methodology – The methodology is that of a literature review combined with an analysis of the development of issues of endogeneity, self-selection, and formation in laboratory experimental research on public goods, charitable contributions, and nonprofit organizations.
Findings – This chapter traces the path of experimental public goods research as viewed through several lenses. There is a correspondence between the period of carefully controlled conditions in laboratory research and the framework of neoclassical economic theory (Lindahl/Samuelson). Indeed this is one of the original purposes of the earliest experiments by economists. However, there has been a distinct shift away from external control towards more endogenous evolution and selection over the past decade.
Originality – There have been several surveys of public goods research (many are referenced in this chapter). To our knowledge, this is the first to set out the history of, and the imperatives for, this new direction.
Purpose – Motivated by new models of nonprofit organizations, we study a voluntary contributions environment in which the productivity of the public goods process is…
Purpose – Motivated by new models of nonprofit organizations, we study a voluntary contributions environment in which the productivity of the public goods process is chosen endogenously by a manager. The experimental treatments incorporate two institutions of transparency in the organization, which we conjecture will assist the manager in achieving an outcome superior to the standard free-riding prediction.
Methodology – The chapter uses the methodology of laboratory experimental economics.
Findings – The findings demonstrate that transparency institutions can be important for assisting the manager and the stakeholders achieve relative stable and efficient outcomes.
Limitations – We discuss obvious areas for further investigation including environments in which firm productivity is only stochastically related to the decisions of the manager.
Practical and Social Implications – The chapter is oriented to real-world issues in the organization of nonprofit enterprises, which were a once ubiquitous and now re-emerging source of charitable activity. The chapter is written so that it should be accessible to informed practitioners in nonprofit organizations.
Originality – The study of endogenous environments and institutions in the provision of charitable and public goods is a relatively new advance and is indeed the theme of Research in Experimental Economics, Volume 13, “Charity with Choice.”