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Clocks and Trees: Isomorphic Dutch Auctions and Centipede Games
Author(s) -
Cox James C.,
James Duncan
Publication year - 2012
Publication title -
econometrica
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 16.7
H-Index - 199
eISSN - 1468-0262
pISSN - 0012-9682
DOI - 10.3982/ecta9589
Subject(s) - common value auction , stylized fact , centipede , mathematical economics , class (philosophy) , set (abstract data type) , tree (set theory) , nash equilibrium , pairwise comparison , computer science , economics , microeconomics , mathematics , combinatorics , artificial intelligence , programming language , biology , ecology , macroeconomics
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.