The Design, Experimental Laboratory Testing and Implementation of a Large, Multi-Market, Policy Constrained, State Gaming Machines Auction

Division of the Humanities and Social Sciences California Institute of Technology, Social Science Working Paper 1447, September 2019

Claremont McKenna College Robert Day School of Economics and Finance Research Paper No. 3456314

50 Pages Posted: 30 Sep 2019

See all articles by Charles R. Plott

Charles R. Plott

California Institute of Technology - Division of the Humanities and Social Sciences

Timothy N. Cason

Purdue University - Krannert School of Management

Ben Gillen

Claremont Colleges, Claremont McKenna College, Robert Day School of Economics and Finance, Students; California Institute of Technology - Division of the Humanities and Social Sciences

Hsing Lee

California Institute of Technology

Travis Maron

California Institute of Technology - Division of the Humanities and Social Sciences

Date Written: September 18, 2019

Abstract

The paper reports on the theory, design, laboratory experimental testing, field implementation and results of a large, multiple market and policy constrained auction. The auction involved the sale of 18,788 ten-year entitlements for the use of electronic gaming machines in 176 interconnected markets to 363 potential buyers representing licensed gaming establishments. The auction was conducted in one day and produced over $600M in revenue. The experiments and revealed dynamics of the multi-round auction provide evidence about basic principles of multiple market convergence found in classical theories of general equilibrium using new statistical tests of the abstract properties of tatonnement.

Keywords: design, auction, tatonnement, experiment

Suggested Citation

Plott, Charles R. and Cason, Timothy N. and Gillen, Ben and Lee, Hsing and Maron, Travis, The Design, Experimental Laboratory Testing and Implementation of a Large, Multi-Market, Policy Constrained, State Gaming Machines Auction (September 18, 2019). Division of the Humanities and Social Sciences California Institute of Technology, Social Science Working Paper 1447, September 2019; Claremont McKenna College Robert Day School of Economics and Finance Research Paper No. 3456314. Available at SSRN: https://ssrn.com/abstract=3456314 or http://dx.doi.org/10.2139/ssrn.3456314

Charles R. Plott (Contact Author)

California Institute of Technology - Division of the Humanities and Social Sciences ( email )

1200 East California Blvd.
337 Baxter Hall
Pasadena, CA 91125
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626-395-4209 (Phone)

Timothy N. Cason

Purdue University - Krannert School of Management ( email )

1310 Krannert Building
West Lafayette, IN 47907-1310
United States
765-494-1737 (Phone)

Ben Gillen

Claremont Colleges, Claremont McKenna College, Robert Day School of Economics and Finance, Students ( email )

500 E. Ninth St.
Claremont, CA 91711-6420
United States

California Institute of Technology - Division of the Humanities and Social Sciences ( email )

1200 East California Blvd.
Pasadena, CA 91125
United States

Hsing Lee

California Institute of Technology ( email )

Pasadena, CA 91125
United States

Travis Maron

California Institute of Technology - Division of the Humanities and Social Sciences ( email )

1200 East California Blvd.
Pasadena, CA 91125
United States

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