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Evolutionary and Institutional Economics Review

, Volume 16, Issue 2, pp 357–374 | Cite as

VCG mechanism for multi-unit auctions and appearance of information: a subject experiment

  • Satoshi Takahashi
  • Yoichi Izunaga
  • Naoki WatanabeEmail author
Article
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Abstract

This paper investigates whether, in multi-unit auctions, different types of appearance of information associated with bidding generate different levels of allocative efficiency and sellers’ revenue when the VCG mechanism is applied to human subject experiments of those auctions. We examine two types of appearance of information about bidders’ valuations of the item given to them and the bids they are asked to submit: One type is unit valuations and the unit bids themselves and the other type is unit valuations and the unit bids multiplied by the number of units. We observed that there was no significant difference on average in either allocative efficiency or the seller’s revenue between these two types of appearance of information. Rather, for each appearance of information, there was a significant difference in subjects’ bidding behavior between different display types of draws of unit valuations. This behavioral difference, however, did not significantly affect allocative efficiency. The performance of the VCG mechanism is robust against display types of those draws as well as against types of appearance of information.

Keywords

Multi-unit auction VCG mechanism Subject experiment 

JEL Classification

C92 D44 D82 

Notes

Acknowledgements

The authors wish to thank Toru Suzuki and Hiroshi Tanaka for their excellent research assistance.

Funding

This research was supported by JSPS Grant-in-Aid for Young Scientists (B) 26870200 and Grant-in-Aid for Scientific Research (B) 15H02972 (Takahashi), and the Japan Center for Economic Research, ORA-Plus research project “BEAM”, and JSPS Grant-in-Aid for Challenging Research (Pioneering) 17H06190 (Watanabe).

Compliance with ethical standards

Conflict of interest

The authors declare that they have no conflict of interest.

Ethical approval

All procedures performed in studies involving human participants were in accordance with the ethical standards of the institutional and/or national research committee and with the 1964 Helsinki Declaration and its later amendments or comparable ethical standards. This article does not contain any studies with animals performed by any of the authors.

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Copyright information

© Japan Association for Evolutionary Economics 2019

Authors and Affiliations

  • Satoshi Takahashi
    • 1
  • Yoichi Izunaga
    • 2
  • Naoki Watanabe
    • 3
    Email author
  1. 1.Graduate School of Informatics and EngineeringThe University of Electro-CommunicationsTokyoJapan
  2. 2.Faculty of EngineeringKanagawa UniversityYokohamaJapan
  3. 3.Graduate School of Business AdministrationKeio UniversityYokohamaJapan

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