What Price Coordination? The Efficiency-enhancing Effect of Auctioning the Right to Play.
A model is proposed to explain the results of recent experiments in which subjects repeatedly played a coordination game, with the right to play auctioned each period in a larger group. Subjects bid the market-clearing price to a level recoverable only in the efficient equilibrium and then converged...
| Main Authors: | , |
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| Format: | Journal article |
| Language: | English |
| Published: |
American Economic Association
1998
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| _version_ | 1826270374491324416 |
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| author | Crawford, V Broseta, B |
| author_facet | Crawford, V Broseta, B |
| author_sort | Crawford, V |
| collection | OXFORD |
| description | A model is proposed to explain the results of recent experiments in which subjects repeatedly played a coordination game, with the right to play auctioned each period in a larger group. Subjects bid the market-clearing price to a level recoverable only in the efficient equilibrium and then converged to that equilibrium, although subjects playing the game without auctions converged to inefficient equilibria. The efficiency-enhancing effect of auctions is reminiscent of forward induction but is not explained by equilibrium refinements. The model explains it by showing how strategic uncertainty interacts with history-dependent learning dynamics to determine equilibrium selection. |
| first_indexed | 2024-03-06T21:39:49Z |
| format | Journal article |
| id | oxford-uuid:4787d3b3-88fc-4236-87a8-1a88b10d6a70 |
| institution | University of Oxford |
| language | English |
| last_indexed | 2024-03-06T21:39:49Z |
| publishDate | 1998 |
| publisher | American Economic Association |
| record_format | dspace |
| spelling | oxford-uuid:4787d3b3-88fc-4236-87a8-1a88b10d6a702022-03-26T15:20:34ZWhat Price Coordination? The Efficiency-enhancing Effect of Auctioning the Right to Play.Journal articlehttp://purl.org/coar/resource_type/c_dcae04bcuuid:4787d3b3-88fc-4236-87a8-1a88b10d6a70EnglishDepartment of Economics - ePrintsAmerican Economic Association1998Crawford, VBroseta, BA model is proposed to explain the results of recent experiments in which subjects repeatedly played a coordination game, with the right to play auctioned each period in a larger group. Subjects bid the market-clearing price to a level recoverable only in the efficient equilibrium and then converged to that equilibrium, although subjects playing the game without auctions converged to inefficient equilibria. The efficiency-enhancing effect of auctions is reminiscent of forward induction but is not explained by equilibrium refinements. The model explains it by showing how strategic uncertainty interacts with history-dependent learning dynamics to determine equilibrium selection. |
| spellingShingle | Crawford, V Broseta, B What Price Coordination? The Efficiency-enhancing Effect of Auctioning the Right to Play. |
| title | What Price Coordination? The Efficiency-enhancing Effect of Auctioning the Right to Play. |
| title_full | What Price Coordination? The Efficiency-enhancing Effect of Auctioning the Right to Play. |
| title_fullStr | What Price Coordination? The Efficiency-enhancing Effect of Auctioning the Right to Play. |
| title_full_unstemmed | What Price Coordination? The Efficiency-enhancing Effect of Auctioning the Right to Play. |
| title_short | What Price Coordination? The Efficiency-enhancing Effect of Auctioning the Right to Play. |
| title_sort | what price coordination the efficiency enhancing effect of auctioning the right to play |
| work_keys_str_mv | AT crawfordv whatpricecoordinationtheefficiencyenhancingeffectofauctioningtherighttoplay AT brosetab whatpricecoordinationtheefficiencyenhancingeffectofauctioningtherighttoplay |