The Times They Are A-Changing: Experimenting with Dynamic Adverse Selection

• 成果类型: Article
• 署名作者: Araujo, Felipe A.; Wang, Stephanie W.; Wilson, Alistair J.
• 署名单位: Lehigh University; Pennsylvania Commonwealth System of Higher Education (PCSHE); University of Pittsburgh
• 刊物名称: AMERICAN ECONOMIC JOURNAL-MICROECONOMICS
• ISSN/ISSBN: 1945-7669
• DOI: 10.1257/mic.20190088
• 发表日期: 2021
• 页码: 1-22
• 关键词: winners curse; INFORMATION

摘要

We examine a common value dynamic matching environment where adverse selection accrues slowly over time. Theoretical best responses are therefore time varying, and the prior experimental literature suggests that sequential environments might lead to greater understanding of adverse selection in this dynamic setting. However, while a sophisticated minority in our experiment do condition on time and are close to a best response, the majority use a stationary response, even after extended experience. In an environment with persistent uncertainty, our results indicate that sequentiality is insufficient for the large majority of participants to recognize the effects of adverse selection.