Revealing consumers' willingness-to-pay: A comparison of the BDM mechanism and the Vickrey auction

Charles Noussair, Stephane Robin, Bernard Ruffieux

Research output: Contribution to journalArticlepeer-review

130 Scopus citations

Abstract

We compare the capability of the Becker-DeGroot-Marschak (BDM) mechanism and the Vickrey auction to reveal willingness-to-pay information for a sample of French consumers. We measure the bias and dispersion of bids relative to valuations. We find that the Vickrey auction, for the particular training procedure we employ, is more effective as a willingness-to-pay elicitation device than the BDM process. We conjecture that differences in the shape of the payoff function account for some of the differences.

Original languageEnglish (US)
Pages (from-to)725-741
Number of pages17
JournalJournal of Economic Psychology
Volume25
Issue number6
DOIs
StatePublished - Dec 2004
Externally publishedYes

Keywords

  • Auction
  • Consumer behavior
  • Willingness-to-pay

ASJC Scopus subject areas

  • Applied Psychology
  • Sociology and Political Science
  • Economics and Econometrics

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