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Field
Experimental Design (Public)
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Before
The experiment will seek to compare three alternative candidates for Knapsack Auctions: the discriminatory-price (DP) auction; the generalized second-price (GSP) auction; and, the uniform-price (UP) auction. Each variation is a treatment. Each iteration of an auction treatment involves 9 participants, and there are 10 iterations per treatment; each iteration will have different participants. There are 20 rounds of bidding planned for each iteration of the treatment.
In order to conduct these experiments, participants will be provided a units of experimental currency. The will also be assigned hypothetical objects with randomly assigned sizes. The participants will be instructed to submit bids (of the experimental currency) so that their object can be selected to fit into a knapsack of limited capacity. Each participant will be assigned a random value of the benefit (measured in units of the experimental currency) received if the object is indeed selected to fill the knapsack. Their cost will be in experimental currency units and will depend on the nature of the auction, as described below:
(a) In a DP auction, the cost to a participant will be his or her bid.
(b) In a GSP auction, the participant will pay the amount of the next lower bid.
(c) in a UP auction, all participants will pay a uniform amount equal to the highest losing bid.
A participant's payoff from the auction is the benefit minus the cost, again measured in units of the experimental currency. The goal of the participants will be to maximize their payoffs.
The outcomes we wish to test are:
(1) Which of the 3 auction versions yields the highest revenue for the seller
(2) Whether the uniform price auction outcomes conform to theoretical prediction of truthful bidding
(3) The extent to which the discriminatory and GSP auctions result in under-bidding
(4) How each of the versions perform in terms of efficiently allocating the knapsack space to potential bidders
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After
The experiment will seek to compare three alternative candidates for Knapsack Auctions: the discriminatory-price (DP) auction; the generalized second-price (GSP) auction; and, the uniform-price (UP) auction. Each variation is a treatment. Each iteration of an auction treatment involves 7 participants, and there are 10 iterations per treatment; each iteration will have different participants. There are 20 rounds of bidding planned for each iteration of the treatment.
In order to conduct these experiments, participants will be provided a units of experimental currency. The will also be assigned hypothetical objects with randomly assigned sizes. The participants will be instructed to submit bids (of the experimental currency) so that their object can be selected to fit into a knapsack of limited capacity. Each participant will be assigned a random value of the benefit (measured in units of the experimental currency) received if the object is indeed selected to fill the knapsack. Their cost will be in experimental currency units and will depend on the nature of the auction, as described below:
(a) In a DP auction, the cost to a participant will be his or her bid.
(b) In a GSP auction, the participant will pay the amount of the next lower bid.
(c) in a UP auction, all participants will pay a uniform amount equal to the highest losing bid.
A participant's payoff from the auction is the benefit minus the cost, again measured in units of the experimental currency. The goal of the participants will be to maximize their payoffs.
The outcomes we wish to test are:
(1) Which of the 3 auction versions yields the highest revenue for the seller
(2) Whether the uniform price auction outcomes conform to theoretical prediction of truthful bidding
(3) The extent to which the discriminatory and GSP auctions result in under-bidding
(4) How each of the versions perform in terms of efficiently allocating the knapsack space to potential bidders
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Field
Planned Number of Observations
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Before
Each iteration will have 9 participants. No participant will can take part in more than one iteration. The total number of unique participants required is 270 participants. Each participant will take part in 20 rounds of bidding in their assigned iteration, so there will be (a maximum of) 5400 bids across all rounds of the auction. Also given that there are 10 iterations for each version of the the knapsack auction, we collect 10 independent observations for each version.
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After
Each iteration will have 7 participants. No participant can take part in more than one iteration. The total number of unique participants required is 210 participants. Each participant will take part in 20 rounds of bidding in their assigned iteration, so there will be (a maximum of) 4200 bids across all rounds of the auction. Also given that there are 10 iterations for each version of the the knapsack auction, we collect 10 independent observations for each version.
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