Implications of the Auction Mechanism in Baseball's Free Agent Draft

Cassing, James; Douglas, Richard W.

doi:10.2307/1057065

Cited by 90 publications

(40 citation statements)

References 5 publications

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“…Rather they solicit bids from large numbers of subcontractors who are responsible for fulfilling their commitments, and then add in their own estimated general contactor costs. 51 For example, auctions for book publication rights (Dessauer, 1981), professional baseball's free agency market (Cassing and Douglas, 1980;Bleckerman and Camerer, 1998), corporate takeover battles (Roll, 1986), and real estate auctions (Ashenfelter and Genesore, 1992). immunity to the disease. It does not however imply that should a new disease strike the community that the survivors will be able to do any better than those who were never impacted by the original disease.…”

mentioning

confidence: 99%

9. Auctions A Survey of Experimental Research

Kagel¹,

Levin²

2016

The Handbook of Experimental Economics, Volume Two

202

135

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mentioning

confidence: 99%

9. Auctions A Survey of Experimental Research

Kagel¹,

Levin²

2016

The Handbook of Experimental Economics, Volume Two

202

135

View full text Add to dashboard Cite

“…Cassing and Douglas (1980) and Blecherman and Camerer (1998) find it in baseball's free agency markets. Dessauer (1981) suggests it exists in bidding for book publishing rights.…”

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confidence: 99%

The Origin of the Winner's Curse: A Laboratory Study

Charness

Levin

2009

American Economic Journal: Microeconomics

107

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The Winner's Curse (WC) is one of the most robust and persistent deviations from theoretical predictions that has been established in experimental economics. We designed and implemented in the laboratory a simplified version of the Acquiring a Company game. Our transformation reduced the game to an individual-choice problem, but one that still retains the key adverse-selection issue that results in the WC. This allows us to isolate the origins of the WC from proposed explanations that have recently been advanced, such as ignoring others' cognition process, having cursed system of beliefs, high variance in payoffs, and/or a misunderstanding of the game. Our main results find that the WC is alive and well in environments where the above explanations are either mute or wrong, and strongly suggest that the WC is better explained by bounded rationality of the form that people have difficulties either performing Bayesian updating or seeing through a complex problem.

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“…Such discrepancies are particularly acute in tasks that require players to make inferences and update their priors based 8 The type-dependent strategy, (A, B, C, D), means that type (0, H) players choose A, type (0, L) players choose B, type (1, H) players choose C, and type (1, L) players choose D. 9 Another interpretation is that the subject is somehow more impatient than that implied by the discount factor, 0.9.…”

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confidence: 99%

“…13 Leading examples include oil and gas lease auctions (see Capen, Clapp, and Campbell (1971), Mead, Moseidjord, and Sorensen (1983) and (1984), and the opposite conclusions reached in Hendricks, Porter, and Boudreau (1987)), baseball's free agent market (see Cassing and Douglas (1980) and Blecherman and Camerer (1998)), book publishing (see Dessauer (1981)), initial public offerings (see Levis (1990) and Rock (1986)), and corporate takeovers (see Roll (1986)). …”

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confidence: 99%

Hindsight, Foresight, and Insight: An Experimental Study of a Small-Market Investment Game with Common and Private Values

Ivanov

Levin

Peck

2009

American Economic Review

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We experimentally test an endogenous-timing investment model in which subjects observe their cost of investing and a signal correlated with the common investment return. Subjects overinvest, relative to the Nash benchmark.We can separately consider whether a subject draws inferences from the other subject's investment, in hindsight, and whether a subject has the foresight to delay profitable investment and learn from market activity. In contrast to Nash, cursed equilibrium, and level-k belief predictions, behavior remains the same across our experimental treatments. Our maximum likelihood estimates are inconsistent with belief-based theories, but are consistent with the notion that subjects use simple rules of thumb, based on insights about the game.

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Implications of the Auction Mechanism in Baseball's Free Agent Draft

Cited by 90 publications

References 5 publications

9. Auctions A Survey of Experimental Research

9. Auctions A Survey of Experimental Research

The Origin of the Winner's Curse: A Laboratory Study

Hindsight, Foresight, and Insight: An Experimental Study of a Small-Market Investment Game with Common and Private Values

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