Testing Distributional Dependence in the Becker-DeGroot-Marschak ...

moves the problem up a level: subjects’ responses would perhaps be influenced by the set of
distributions chosen by the experimenter.
5.3 Mitigation Through Training
Although every subject in this study faced multiple BDM elicitations, each experienced only one
BDM resolution, which came after all BDM elicitations had been irrevocably made. This study
does not address learning that may occur as subjects gain more first-hand familiarity with the
possible outcomes of the institution. It is possible that subjects would alter their strategies in
subsequent encounters with the BDM mechanism in the wake of experiencing regret from either
paying too much for an item or not obtaining an item at an attractive price. It might be
expected that subjects trained through multiple exposures to BDM resolutions with real stakes
would submit more accurate and more stable elicitations, in line with evidence that market
experience often reduces deviations from theoretical predictions in experimental settings. 47
Training might improve the accuracy and stability of elicitations through the channel of
comprehension alone. Observing the institution in action firsthand might clear up any remaining
confusion subjects have about how the price that they pay will be determined or whether or not
they will have the option of renegotiating the sale or price later. Intuitively, training might be
even more effective if subjects experience forgone gains or unnecessary losses in early encounters
with BDM resolutions. That is, regret might be a more powerful channel for inducing more
refined future elicitations than increased comprehension alone. This notion is reflected in the
BDM literature, which often presumes that agents are driven to avoid or minimize ex post regret.
The survey data in this study do not offer a strong case for the presence of regret. Five
subjects failed to obtain the item when the random price was lower than their average reported
valuation over the 20 BDM rounds. Four obtained the item at a randomly drawn price that was
higher than their average reported valuation over the 20 BDM rounds. Though these subjects’
47 See List (2003).
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