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An experimental study on the incentives of the probabilistic serial mechanism
[working paper]
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Wissenschaftszentrum Berlin für Sozialforschung gGmbH
Abstract We report an experiment on the Probabilistic Serial (PS) mechanism for allocating indivisible goods. The PS mechanism, a recently discovered alternative to the widely used Random Serial Dictatorship mechanism, has attractive fairness and efficiency properties if people report their preferences truth... view more
We report an experiment on the Probabilistic Serial (PS) mechanism for allocating indivisible goods. The PS mechanism, a recently discovered alternative to the widely used Random Serial Dictatorship mechanism, has attractive fairness and efficiency properties if people report their preferences truthfully. However, the mechanism is not strategy-proof, so participants may not truthfully report their preferences. We investigate misreporting in a set of simple applications of the PS mechanism. We confront subjects with situations in which theory suggests that there is an incentive or no incentive to misreport. We find little misreporting in situations where misreporting is a Nash equilibrium. However, we also find a significant degree of misreporting in situations where there is actually no benefit in doing so. These findings suggest that the PS mechanism may have problems in terms of truthful elicitation. (author's abstract)... view less
Keywords
incentive system; behavior; experiment
Classification
Basic Research, General Concepts and History of Economics
Social Psychology
Free Keywords
probabilistisch serieller Mechanismus
Document language
English
Publication Year
2013
City
Berlin
Page/Pages
20 p.
Series
Discussion Papers / Wissenschaftszentrum Berlin für Sozialforschung, Forschungsschwerpunkt Markt und Entscheidung, Abteilung Verhalten auf Märkten, SP II 2013-204
Handle
https://hdl.handle.net/10419/74786
Status
Published Version; reviewed
Licence
Deposit Licence - No Redistribution, No Modifications