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» Jan 10 Seminar: Neslihan Uler

Jan 10 Seminar: Neslihan Uler

Date: 
Thu, 01/10/2008 - 11:00am - 12:30pm
Seminar Information: 

Neslihan Uler

Research Fellow, Research Center for Group Dynamics, ISR, UM

"Behavioral Differences between Direct and Indirect Mechanisms: Evidence from First Price Auctions"
Location: 

4-5:30 pm
UM: 411 West Hall
WSU: 313 State Hall (via videoconference)

Neslihan Uler
Seminar Description: 

The Revelation Principle depends on a seemingly innocuous assumptio theoretically outcome-equivalent (TOE) direct and indirect mechanisms are behaviorally equivalent as well. We use the first-price sealed-bid auction as our indirect mechanism and construct corresponding TOE direct mechanisms.

In contrast with what theory predicts, subjects behave significantly differently under direct and indirect mechanisms: (i) The revenue equivalence does not hold - the indirect mechanism generated higher revenue than the direct mechanisms, (ii) subjects behaved as if they were less risk averse in the direct mechanisms, (iii) moreover, we observed different bids across direct mechanisms. We show that a reference-dependent model explains the behavioral differences.

Link to the paper is: http://www-personal.umich.edu/~neslihan/Uler_auction.pdf

Seminar Speaker Bio: 

Neslihan Uler received a Ph.D in Economics at New York University in May 2007. Her fields of interest are experimental economics, development economics, public economics and applied game theory. Currently she is a research fellow at RCGD, Institute for Social Research.