Naturally occurring markets and exogenous laboratory experiments: a case study of the winner's curse
There has been a dramatic increase in the use of experimental methods in the past two decades. An oft-cited reason for this rise in popularity is that experimental methods provide the necessary control to estimate treatment effects in isolation of other confounding factors. We examine the relevance...
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| Main Authors: | , |
|---|---|
| Format: | Book |
| Language: | English |
| Published: |
Cambridge, Mass.
National Bureau of Economic Research
2007
|
| Series: | Working paper series / National Bureau of Economic Research
13072 |
| Online Access: | Volltext |
| Summary: | There has been a dramatic increase in the use of experimental methods in the past two decades. An oft-cited reason for this rise in popularity is that experimental methods provide the necessary control to estimate treatment effects in isolation of other confounding factors. We examine the relevance of experimental findings from laboratory settings that abstract from the field context of the task that theory purports to explain. Using common value auction theory as our guide, we identify naturally occurring settings in which one can test the theory. In our treatments the subjects are not picked at random, as in lab experiments with student subjects, but are deliberately identified by their trading roles in the natural field setting. We find that experienced agents bidding in familiar roles do not fall prey to the winner's curse. Yet, when experienced agents are observed bidding in an unfamiliar role, we find that they frequently fall prey to the winner's curse. We conclude that the theory predicts field behavior well when one is able to identify naturally occurring field counterparts to the key theoretical conditions. |
| Physical Description: | 33 S. graph. Darst. 22 cm |
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| index_date | 2024-07-02T22:41:31Z |
| indexdate | 2024-07-09T21:25:14Z |
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| physical | 33 S. graph. Darst. 22 cm |
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| series2 | Working paper series / National Bureau of Economic Research |
| spelling | Harrison, Glenn W. 1955- Verfasser (DE-588)114385017 aut Naturally occurring markets and exogenous laboratory experiments a case study of the winner's curse Glenn W. Harrison ; John A. List Cambridge, Mass. National Bureau of Economic Research 2007 33 S. graph. Darst. 22 cm txt rdacontent n rdamedia nc rdacarrier Working paper series / National Bureau of Economic Research 13072 There has been a dramatic increase in the use of experimental methods in the past two decades. An oft-cited reason for this rise in popularity is that experimental methods provide the necessary control to estimate treatment effects in isolation of other confounding factors. We examine the relevance of experimental findings from laboratory settings that abstract from the field context of the task that theory purports to explain. Using common value auction theory as our guide, we identify naturally occurring settings in which one can test the theory. In our treatments the subjects are not picked at random, as in lab experiments with student subjects, but are deliberately identified by their trading roles in the natural field setting. We find that experienced agents bidding in familiar roles do not fall prey to the winner's curse. Yet, when experienced agents are observed bidding in an unfamiliar role, we find that they frequently fall prey to the winner's curse. We conclude that the theory predicts field behavior well when one is able to identify naturally occurring field counterparts to the key theoretical conditions. List, John A. 1968- Verfasser (DE-588)124330827 aut Erscheint auch als Online-Ausgabe National Bureau of Economic Research <Cambridge, Mass.> NBER working paper series 13072 (DE-604)BV002801238 13072 http://papers.nber.org/papers/w13072.pdf kostenfrei Volltext |
| spellingShingle | Harrison, Glenn W. 1955- List, John A. 1968- Naturally occurring markets and exogenous laboratory experiments a case study of the winner's curse |
| title | Naturally occurring markets and exogenous laboratory experiments a case study of the winner's curse |
| title_auth | Naturally occurring markets and exogenous laboratory experiments a case study of the winner's curse |
| title_exact_search | Naturally occurring markets and exogenous laboratory experiments a case study of the winner's curse |
| title_exact_search_txtP | Naturally occurring markets and exogenous laboratory experiments a case study of the winner's curse |
| title_full | Naturally occurring markets and exogenous laboratory experiments a case study of the winner's curse Glenn W. Harrison ; John A. List |
| title_fullStr | Naturally occurring markets and exogenous laboratory experiments a case study of the winner's curse Glenn W. Harrison ; John A. List |
| title_full_unstemmed | Naturally occurring markets and exogenous laboratory experiments a case study of the winner's curse Glenn W. Harrison ; John A. List |
| title_short | Naturally occurring markets and exogenous laboratory experiments |
| title_sort | naturally occurring markets and exogenous laboratory experiments a case study of the winner s curse |
| title_sub | a case study of the winner's curse |
| url | http://papers.nber.org/papers/w13072.pdf |
| volume_link | (DE-604)BV002801238 |
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