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
50 Pages Posted: 30 Sep 2019
Date Written: September 18, 2019
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
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