BEHAVIORALLY OPTIMAL AUCTION DESIGN: EXAMPLES AND OBSERVATIONS

• 成果类型: Article
• 署名作者: Crawford, Vincent P.; Kugler, Tamar; Neeman, Zvika; Pauzner, Ady
• 署名单位: University of California System; University of California San Diego; University of Arizona; Boston University; Tel Aviv University
• 刊物名称: JOURNAL OF THE EUROPEAN ECONOMIC ASSOCIATION
• ISSN/ISSBN: 1542-4766
• DOI: 10.1162/JEEA.2009.7.2-3.377
• 发表日期: 2009
• 页码: 377-387
• 关键词: mechanism-design; iterative dominance; strategic thinking; games

摘要

This paper begins to explore behavioral mechanism design, replacing equilibrium by a model based on level-k thinking, which has strong support in experiments. In representative examples, we consider optimal sealed-bid auctions with two symmetric bidders who have independent private values, assuming that the designer knows the distribution of level-k bidders. We show that in a first-price auction, level-k bidding changes the optimal reserve price and often yields expected revenue that exceeds Myerson's (1981) bound; and that an exotic auction that exploits bidders' non-equilibrium beliefs can far exceed the revenue bound. We close with some general observations about level-k auction design. (JEL: C72, C92)