Improving the use of experimental auctions in Africa: Theory and evidence

Type Journal Article - Journal of Agricultural and Resource Economics
Title Improving the use of experimental auctions in Africa: Theory and evidence
Author(s)
Publication (Day/Month/Year) 2011
Page numbers 263-279
URL http://www.waeaonline.org/jareonline/archives/36.2 - August 2011/JARE,Aug2011,pp263,Morawetz.pdf
Abstract
Experimental auctions have not been widely used in Africa. However, auctions are important
tools for evaluating new products and technologies. To increase the quality of these experiments,
we explore an alternative first-price bidding mechanism that is more similar to African market
exchanges and we analyze factors likely to affect bidding. Experiments with African consumers
show that the proposed first-price mechanism has no advantage over conventional second-price
mechanisms. Results show high and significant cash-in-hand, experimenter, and time of day
effects in main rounds, and significant ordering effects in test rounds. These effects need to be
carefully considered when applying the Becker-DeGroot-Marschak mechanism in Africa.

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