D44, C90, auction theory, ascending auctions, jump bidding,

No abstract

We report an experiment designed to study whether inefficient firms are systematically driven from overcrowded markets. Our data set includes a series of 3,800 wars of attrition of a type modeled by Fudenberg and Tirole in 1986. We find that exit tends to be efficient and exit times conform surprisingly well to point predictions of the model. Moreover, subjects respond similarly to implementations framed in terms of losses as they do to those framed in terms of gains. (JEL D21, L11, C92)

We experimentally compare electoral outcomes when donor contribution limits are varied. The effect of contribution limits is studied under three levels of transparency: one where donors' preferences and donations are unobserved by the candidate and public; one where they are observed by the candidate but not the public; and one where they are observed by all. We find that a combination of stricter contribution limits and full transparency is most successful at limiting donors' influence on policy choice. We also find that stricter contribution limits improve social welfare in some treatments. We further find that the partial and no anonymity settings lead to “centrist bias,” whereby implemented policies, on average, are more centrist than the candidate's preferences in most treatments.

We experimentally study the transparency effect of alternative campaign finance systems on donations, election outcomes, policy choices, and welfare. Three alternatives are considered: one where donors' preferences and donations are unobserved by the candidate and public; one where they are observed by the candidate but not the public; and one where they are observed by all. We label them full anonymity (FA), partial anonymity (PA), and no anonymity (NA), respectively. We find that in NA and PA candidates consistently respond to donations by choosing policies favoring the donors. FA, in contrast, is the most successful in limiting the influence of donations on policy choices. Donors benefit greatly from the possibility of donations whereas social welfare may be harmed in some treatments. To our knowledge, this article is the first to investigate the effect of different campaign finance systems distinguished by their transparency level. (JEL D72)Just as troubling to a functioning democracy as classic quid pro quo corruption is the danger that officeholders will decide issues not on the merits or the desires of their constituents, but according to the wishes of those who have made large financial contributions valued by the officeholder. -U.S. Supreme Court, McConnell v. FEC [540 U.S. 93 (2003)]