Article ID: | iaor2008550 |
Country: | United States |
Volume: | 51 |
Issue: | 12 |
Start Page Number: | 1829 |
End Page Number: | 1843 |
Publication Date: | Dec 2005 |
Journal: | Management Science |
Authors: | Budescu David V., Maciejovsky Boris |
Keywords: | bidding |
A vast literature shows that individuals frequently violate normative principles in reasoning. In this paper, we report the results of four studies designed to determine if information dissemination in competitive auctions can reduce, or even eliminate, logical errors in the Wason selection task. Our results show that payoff feedback and exposure to the information flow drive the aggregate behavior toward the normative solution. We also found evidence of spillover effects from informed to uninformed traders in one-sided combinatorial auctions, as well as positive transfer effects from competitive to individual settings.