Econometrica: Mar 2012, Volume 80, Issue 2
Clocks and Trees: Isomorphic Dutch Auctions and Centipede Games
https://doi.org/10.3982/ECTA9589
p.
883-903
James C. Cox, Duncan James
We report an experiment on effects of varying institutional format and dynamic structure of centipede games and Dutch auctions. Centipede games with a clock format unravel, as predicted by theory but not reported in previous literature on two‐player tree‐format centipede games. Dutch auctions with a tree format produce bids close to risk neutral Nash equilibrium bids, unlike previous literature on clock‐format Dutch auctions. Our data provide a new, expanded set of stylized facts which may provide a foundation for unified modeling of play in a class of games that includes centipede games and Dutch auctions.Log In To View Full Content