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Title:Ranking alternatives by a fair bidding rule: A theoretical and experimental analysis PDF Logo
Authors:Güth, Werner
Levati, M. Vittoria
Montinari, Natalia
Issue Date:2012
Series/Report no.:Jena economic research papers 2012,005
Abstract:We introduce a procedurally fair rule to study a situation where people disagree about the value of three alternatives in the way captured by the voting paradox. The rule allows people to select a final collective ranking by submitting a bid vector with six components (the six possible rankings of the three alternatives). In a laboratory experiment we test the robustness of the rule to the introduction of subsidies and taxes. We have two main results. First, in all treatments, the most frequently chosen ranking is the socially efficient one. Second, subsidies slightly enhance overbidding. Furthermore, an analysis of individual bid vectors reveals interesting behavioral regularities.
Subjects:bidding behavior
procedural fairness
voting paradox
JEL:C92
D02
D71
Document Type:Working Paper
Appears in Collections:Jena Economic Research Papers, MPI für Ökonomik

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