Selection Bias, Demographic Effects, and Ability Effects in Common Value Auction Experiments (2007)
| Venue: | American Economic Review |
| Citations: | 8 - 2 self |
BibTeX
@ARTICLE{Casari07selectionbias,,
author = {Marco Casari and John C. Ham and John H. Kagel},
title = {Selection Bias, Demographic Effects, and Ability Effects in Common Value Auction Experiments},
journal = {American Economic Review},
year = {2007},
pages = {12781304}
}
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Abstract
We find clear demographic and ability effects on bidding in common value auction experiments as inexperienced subjects with higher (lower) SAT/ACT scores are less (more) likely to bankrupt than those with middle level scores, inexperienced women suffer far more from the winner’s curse than do men, and economics and business majors substantially overbid relative to other majors. There are strong selection effects in bid estimates for both inexperienced and experienced subjects which, although they are not identified using standard econometric techniques, are identified through our experimental treatment effects. Ignoring these selection effects is most misleading for inexperienced bidders, as the biased estimates indicate much slower learning and adjustment to the winner’s curse for individual bidders than do the unbiased estimates. JEL classification: C9, D44, C24, J16. Key words: common value auction experiments, selection effects, econometric methods, gender and ability effects.
