Selection Bias, Demographic Effects, and Ability Effects in Common Value Auction Experiments
John C. Ham, and
John H. Kagel. 2007. "Selection Bias, Demographic Effects, and Ability Effects in Common Value Auction Experiments."
American Economic Review,
Inexperienced women, along with economics and business majors, are much
more susceptible to the winner's curse, as are subjects with lower SAT/ACT
scores. There are strong selection effects in bid function estimates for inexperienced
and experienced subjects due to bankruptcies and bidders who
have lower earnings returning less frequently as experienced subjects. These
selection effects are not identified using standard econometric techniques but
are identified through experimental treatment effects. Ignoring these selection
effects leads to misleading estimates of learning. (JEL D44, D83, J16)
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Ham, John C.
Kagel, John H.