Article ID Journal Published Year Pages File Type
5088207 Journal of Banking & Finance 2016 10 Pages PDF
Abstract
Experimental research suggests the Walrasian tâtonnement auction encourages traders to under-reveal preferences, even encouraging initial pledges contrary to true desires, because pledges are not binding. We analyze the timing and characteristics of individual pledges and trades during 9604 auctions for redbeans conducted by the Tokyo Grain Exchange. We find no evidence of contrarian pledging and little evidence of under-revelation - as many traders over-reveal as under-reveal. Most traders pledge seriously from the beginning. Despite the considerable heterogeneity in pledging behavior across individual traders, these differences appear to have no relationship with traders' profits, nor do they appear to affect the achievement of equilibrium.
Related Topics
Social Sciences and Humanities Economics, Econometrics and Finance Economics and Econometrics
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