{"title":"Bringing Real Market Participants' Real Preferences into the Lab: An Experiment that Changed the Course Allocation Mechanism at Wharton","authors":"Eric Budish, Judd B. Kessler","doi":"10.3386/w22448","DOIUrl":null,"url":null,"abstract":"This paper reports on an experimental test of a new market design that is attractive in theory but makes the common and potentially unrealistic assumption that “agents report their type†; that is, that market participants can perfectly report their preferences to the mechanism. Concerns about preference reporting led to a novel experimental design that brought real market participants’ real preferences into the lab, as opposed to endowing experimental subjects with artificial preferences as is typical in market design. The experiment found that market participants were able to report their preferences “accurately enough†to realize efficiency and fairness benefits of the mechanism even while preference-reporting mistakes meaningfully harmed mechanism performance. [Working Paper 22448]","PeriodicalId":18934,"journal":{"name":"National Bureau of Economic Research","volume":"162 1","pages":""},"PeriodicalIF":0.0000,"publicationDate":"2016-07-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"19","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"National Bureau of Economic Research","FirstCategoryId":"1085","ListUrlMain":"https://doi.org/10.3386/w22448","RegionNum":0,"RegionCategory":null,"ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"","JCRName":"","Score":null,"Total":0}
引用次数: 19
Abstract
This paper reports on an experimental test of a new market design that is attractive in theory but makes the common and potentially unrealistic assumption that “agents report their type†; that is, that market participants can perfectly report their preferences to the mechanism. Concerns about preference reporting led to a novel experimental design that brought real market participants’ real preferences into the lab, as opposed to endowing experimental subjects with artificial preferences as is typical in market design. The experiment found that market participants were able to report their preferences “accurately enough†to realize efficiency and fairness benefits of the mechanism even while preference-reporting mistakes meaningfully harmed mechanism performance. [Working Paper 22448]
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