Abstract
Mechanism design experiments bridge the gap between a theoretical mechanism and an actual economic process. In the domain of public goods, matching and combinatorial auctions and laboratory experiments identify features of mechanisms that lead to good performance when implemented among boundedly rational agents. These features include dynamic stability and security in public goods mechanisms, transparency in matching mechanisms, package bidding, simultaneity and iteration in combinatorial auctions.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Bibliography
Abdulkadiroglu, A., and T. Sönmez. 1998. Random serial dictatorship and the core from random endowments in house allocation problems. Econometrica 66: 689–701.
Andreoni, J., and R. Petrie. 2004. Public goods experiments without confidentiality: A glimpse into fund-raising. Journal of Public Economics 88: 1605–1623.
Arifovic, J., and J. Ledyard. 2006. Computer testbeds and mechanism design: Application to the class of Groves-Ledyard mechanisms for provision of public goods. Caltech working paper. Pasadena.
Attiyeh, G., R. Franciosi, and M. Isaac. 2000. Experiments with the pivot process for providing public goods. Public Choice 102: 95–114.
Aumann, R. 1992. Foreword. In Two-Sided matching: A study in game-theoretic modeling and analysis, ed. E. Alvin, M.A. Roth, and O. Sotomayor. Cambridge: Cambridge University Press.
Bagnoli, M., and B. Lipman. 1989. Provision of public goods: Fully implementing the core through private contributions. Review of Economic Studies 56: 583–602.
Banks, J.S., J.O. Ledyard, and D.P. Porter. 1989. Allocating uncertain and unresponsive resources: An experimental approach. Rand Journal of Economics 20: 1–25.
Banks, J., M. Olson, D. Porter, S. Rassenti, and V. Smith. 2003. Theory, experiment and the federal communications commission spectrum auctions. Journal of Economic Behavior and Organization 51: 303–350.
Beenen, G., K. Ling, X. Wang, K. Chang, D. Frankowski, P. Resnick, and R. Kraut. 2004. In Proceedings of ACM computer supported cooperative work 2004, conference on computer supported cooperative work. Chicago: ACM.
Brunner, C., J. Goeree, C. Holt, and J. Ledyard. 2006. Combinatorial auctioneering, Caltech working paper. Pasadena.
Bykowsky, M., R. Cull, and J. Ledyard. 2000. Mutually destructive bidding: The FCC auction design problem. Journal of Regulatory Economics 17: 205–228.
Cason, T., T. Saijo, T. Sjöström, and T. Yamato. 2006. Secure implementation experiments: Do strategy-proof mechanisms really work? Games and Economic Behavior 57: 206–235.
Charles River Associates Inc. and Market Design Inc. 1998. Report No. 1351–00.
Chen, Y. 2002. A family of supermodular Nash mechanisms implementing Lindahl allocations. Economic Theory 19: 773–790.
Chen, Y. 2008. Incentive-compatible mechanisms for pure public goods: A survey of experimental literature. In The handbook of experimental economics results, ed. D. Plott and V. Smith. Amsterdam: Elsevier.
Chen, Y., and R. Gazzale. 2004. Supermodularity and convergence: An experimental study of the compensation mechanism. American Economic Review 94: 1505–1535.
Chen, Y., and K. Takeuchi. 2005. Multi-object auctions with package bidding: An experimental comparison of Vickrey and iBEA. Working paper.
Chen, Y., and C.R. Plott. 1996. The Groves–Ledyard mechanism: An experimental study of institutional design. Journal of Public Economics 59: 335–364.
Chen, Y., and T. Sonmez. 2002. Improving efficiency of on-campus housing: An experimental study. American Economic Review 92: 1669–1686.
Chen, Y., and T. Sonmez. 2006. School choice: An experimental study. Journal of Economic Theory 127: 202–231.
Chen, Y., and F.-F. Tang. 1998. Learning and incentive compatible mechanisms for public goods provision: An experimental study. Journal of Political Economy 106: 633–662.
Clarke, E.H. 1971. Multipart pricing of public goods. Public Choice 11: 17–33.
Corchon, L., and S. Wilkie. 1996. Double implementation of the ratio correspondence by a market mechanism. Review of Economic Design 2: 325–337.
Eckel, C., and P. Grossman. 2005. Managing diversity by creating team identity. Journal of Economic Behavior & Organization 58: 371–392.
Falkinger, J. 1996. Efficient private provision of public goods by rewarding deviations from average. Journal of Public Economics 62: 413–422.
Falkinger, J., E. Fehr, S. Gächter, and R. Winter-Ebmer. 2000. A simple mechanism for the efficient provision of public goods: Experimental evidence. American Economic Review 90: 247–264.
Gale, D., and L. Shapley. 1962. College admissions and the stability of marriage. American Mathematical Monthly 69: 9–15.
Green, J., and J.-J. Laffont. 1977. Characterization of satisfactory mechanisms for the revelation of the preferences for public goods. Econometrica 45: 427–438.
Grether, D., M. Isaac, and C. Plott. 1981. The allocation of landing rights by unanimity among competitiors. American Economic Review 71: 166–171.
Groves, T. 1973. Incentives in teams. Econometrica 41: 617–631.
Groves, T., and J. Ledyard. 1977. Optimal allocation of public goods: A solution to the ‘free rider’ problem. Econometrica 45: 783–809.
Groves, T., and J. Ledyard. 1987. Incentive compatibility since 1972. In Essays in honor of Leonid Hurwicz, ed. T. Groves, R. Radner, and S. Reiter. Minneapolis: University of Minnesota Press.
Harkins, S.G. 1987. Social loafing and social facilitation. Journal of Experimental Social Psychology 23: 1–18.
Harstad, R.M., and M. Marrese. 1981. Implementation of mechanism by processes: Public good allocation experiments. Journal of Economic Behavior & Organization 2: 129–151.
Harstad, R.M., and M. Marrese. 1982. Behavioral explanations of efficient public good allocations. Journal of Public Economics 19: 367–383.
Healy, P.J. 2006. Learning dynamics for mechanism design: An experimental comparison of public goods mechanisms. Journal of Economic Theory 129: 114–149.
Hurwicz, L. 1972. On informationally decentralized systems. In Decision and organization, ed. C. McGuire and R. Radner. Amsterdam: North-Holland.
Hurwicz, L. 1975. On the existence of allocation systems whose manipulative Nash equilibria are Pareto-optimal. Paper presented at Third World Congress of the Econometric Society, Toronto.
Hurwicz, L. 1979. Outcome functions yielding Walrasian and Lindahl allocations at Nash equilibrium points. Review of Economic Studies 46: 217–225.
Isaac, R., and D. James. 2000. Robustness of the incentive compatible combinatorial auction. Experimental Economics 3: 31–53.
Jackson, M., and H. Moulin. 1992. Implementing a public project and distributing its cost. Journal of Economic Theory 57: 125–140.
Kaneko, M. 1977. The ratio equilibria and the core of the voting game in a public goods economy. Econometrica 45: 1589–1594.
Kauru, S.J., and K.D. Williams. 1993. Social loafing: A meta-analytic review and theoretical integration. Journal of Personality and Social Psychology 65: 681–706.
Kawagoe, T., and T. Mori. 2001. Can pivotal mechanism induce truth-telling? An experimental study. Public Choice 108: 331–354.
Kim, T. 1986. On the nonexistence of a stable Nash mechanism implementing Lindahl allocations. Mimeo: University of Minnesota.
Kim, T. 1993. A stable Nash mechanism implementing Lindahl allocations for quasi- linear environments. Journal of Mathematical Economics 22: 359–371.
Kwasnica, A.M., J.O. Ledyard, D. Porter, and C. DeMartini. 2005. A new and improved design for multi-object iterative auctions. Management Science 51: 419–434.
Ledyard, J. 2007. Optimal combinatoric auctions with single-minded bidders. Proceedings of the 8th ACM conference on electronic commerce. San Diego: ACM.
Ledyard, J., and T. Palfrey. 1994. Voting and lottery drafts as efficient public goods mechanisms. Review of Economic Studies 61: 327–355.
Ledyard, J., D. Porter, and C. Noussair. 1996. The allocation of a shared resource within an organization. Economic Design 2: 163–192.
Ledyard, J., D. Porter, and A. Rangel. 1997. Experiments testing multiobject allocation mechanisms. Journal of Economics and Management Strategy 6: 639–675.
Ledyard, J., M. Olson, D. Porter, J. Swanson, and D. Torma. 2002. The first use of a combined value auction for transportation services. Interfaces 32: 4–12.
Mailath, G., and A. Postlewaite. 1990. Asymmetric information bargaining problems with many agents. Review of Economic Studies 57: 351–367.
McAfee, P.R., and J. McMillan. 1996. Analyzing the airwaves auction. Journal of Economic Perspectives 10(1): 159–175.
McCabe, K., S. Rassenti, and V. Smith. 1989. Designing ‘smart’ computer assisted markets. European Journal of Political Economy 5: 259–283.
Milgrom, P., and J. Roberts. 1990. Rationalizability, learning and equilibrium in games with strategic complementarities. Econometrica 58: 1255–1277.
Milgrom, P., and C. Shannon. 1994. Monotone comparative statics. Econometrica 62: 157–180.
Millgrom, P. 2000. Putting auction theory to work: The simultaneous ascending auction. Journal of Political Economy 108: 245–272.
Mori, T. 1989. Effectiveness of mechanisms for public goods provision: An experimental study. Economic Studies 40: 234–246.
Pais, J., and A. Pintér. 2006. School choice and information: An experimental study on matching mechanisms. Working paper, Institute for Economics and Business Administration (ISEG). Lisbon: Technical University.
Parkes, D., and L. Unger. 2000. Iterative combinatorial auctions: Theory and practice. In Proceedings of the 17th national conference on artificial intelligence (AAAI-00).
Peleg, B. 1996. Double implementation of the Lindahl equilibrium by a continuous mechanism. Economic Design 2: 311–324.
Porter, D.P. 1999. The effect of bid withdrawal in a multi-object auction. Review of Economic Design 4: 73–97.
Porter, D., S. Rassenti, A. Roopnarine, and V. Smith. 2003. Combinatorial auction design. Proceedings of the National Academy of Sciences 100: 11153–11157.
Rassenti, S., V. Smith, and R. Bulfin. 1982. A combinatorial auction mechanism for airport time slot allocation. Bell Journal of Economics 13: 402–417.
Roberts, J. 1979. Incentives and planning procedures for the provision of public goods. Review of Economic Studies 46: 283–292.
Saijo, T., T. Sjöström, and T. Yamato. 2005. Secure implementation. Working paper, no. 567–0047. Osaka: Institute of Social and Economic Research, Osaka University.
Shapley, L.S., and H. Scarf. 1974. On cores and indivisibilities. Journal of Mathematical Economics 1: 23–37.
Smith, V. 1979a. Incentive compatible experimental processes for the provision of public goods. In Experimental economics, vol. 1, ed. R. Smith and R. Smith. Greenwich: JAI Press.
Smith, V. 1979b. An experimental comparison of three public goods decision mechanisms. Scandinavian Journal of Economics 81: 198–251.
Tajfel, H., and J.C. Turner. 1986. The social identity theory of intergroup behaviour. In Psychology of intergroup relations, ed. S. Worchel and W. Austin. Chicago: Nelson-Hall.
Takeuchi, K., J. Lin, Y. Chen, and T. Finholt. 2006. Shake it up baby: Scheduling with package auctions. Working paper. School of Information, University of Michigan.
Tian, G. 1989. Implementation of the Lindahl correspondence by a single-valued, feasible, and continuous mechanism. Review of Economic Studies 56: 613–621.
Varian, H. 1994. A solution to the problems of externalities when agents are well- informed. American Economic Review 84: 1278–1293.
Vickrey, W. 1961. Counterspeculation, auctions and competitive sealed tenders. Journal of Finance 16: 8–37.
Walker, M. 1980. On the impossibility of a dominant strategy mechanism to optimally decide public questions. Econometrica 48: 1521–1540.
Walker, M. 1981. A simple incentive compatible scheme for attaining Lindahl allocations. Econometrica 49: 65–71.
Wang, Y., and A. Krishna. 2006. Timeshare exchange mechanisms. Management Science 52: 1123–1137.
Author information
Authors and Affiliations
Editor information
Copyright information
© 2018 Macmillan Publishers Ltd.
About this entry
Cite this entry
Chen, Y., Ledyard, J.O. (2018). Mechanism Design Experiments. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_2071
Download citation
DOI: https://doi.org/10.1057/978-1-349-95189-5_2071
Published:
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-95188-8
Online ISBN: 978-1-349-95189-5
eBook Packages: Economics and FinanceReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences