Document Type
Article
Publication Date
2005
Abstract
When the value of a product or service is uncertain, outcomes can be inefficient. A market for evaluations can theoretically increase efficiency by voluntarily eliciting an evaluation that would otherwise not be provided. This paper uses a controlled laboratory experiment to test the performance of four market mechanisms to provide product evaluations. The mechanisms considered are derived from the oft studied uniform price sealed bid, discriminatory price sealed bid, English clock auction, and Dutch clock auction. Our results indicate for this nonrivalrous product that (i) each of these institutions improves social welfare and (ii) the performances of the four mechanisms are equivalent. This second point is particularly noteworthy given that differing behavior is routinely observed in traditional private value auctions.
Recommended Citation
Deck, Cary A., and Bart J. Wilson. "Auction Markets for Evaluations." Southern Economic Journal 72.1 (2005): 42-62.
Peer Reviewed
1
Copyright
Southern Economic Association
Comments
This article was originally published in Southern Economic Journal, volume 72, issue 1, in 2005.