Naturally Occurring Markets and Exogenous Laboratory Experiments

A Case Study of The Winner's Curse

Bibliographic Data

ID9718665
AuthorsGlenn W Harrison (0000-0003-1837-8020, University of Central Florida), John A List (0000-0002-1740-3848, NBER and University of Chicago)
Year2008
Volume118
Issue528
Pages822-843
Publication date2008-04-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueThe Economic Journal (JOURNAL)
Journal identifiersISSN: 0013-0133 • E-ISSN: 1468-0297
PublisherOxford University Press (OUP) (PUBLISHER)
DOI10.1111/j.1468-0297.2008.02144.x
OpenAlexW1997622479
LanguageEN
Citations received6
References cited18

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. Experienced agents bidding in familiar roles do not fall prey to the winner's curse. Yet, experienced agents fall prey to the winner's curse when bidding in an unfamiliar role. We conclude that the theory predicts field behaviour well when one is able to identify naturally occurring field counterparts to the key theoretical conditions. Copyright © 2008 The Author(s)

Curse · Economics · Library science · Sociology · Auction Theory and Applications · Classics · Computer Science · Consumer Market Behavior and Pricing · Experimental Behavioral Economics Studies · History