Auctions, Market Mechanisms, and Their Applications. Second International ICST Conference, AMMA 2011, NewYork, NY, USA, August 22-23, 2011, Revised Selected Papers

Research Article

Evaluating Hidden Market Design

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  • @INPROCEEDINGS{10.1007/978-3-642-30913-7_3,
        author={Florian Teschner and Christof Weinhardt},
        title={Evaluating Hidden Market Design},
        proceedings={Auctions, Market Mechanisms, and Their Applications. Second International ICST Conference, AMMA 2011, NewYork, NY, USA, August 22-23, 2011, Revised Selected Papers},
        proceedings_a={AMMA},
        year={2012},
        month={10},
        keywords={Hidden market design Prediction markets Trading interfaces Marco-economic variables},
        doi={10.1007/978-3-642-30913-7_3}
    }
    
  • Florian Teschner
    Christof Weinhardt
    Year: 2012
    Evaluating Hidden Market Design
    AMMA
    Springer
    DOI: 10.1007/978-3-642-30913-7_3
Florian Teschner1,*, Christof Weinhardt1,*
  • 1: Karlsruhe Institute of Technology (KIT)
*Contact email: teschner@kit.edu, weinhardt@kit.edu

Abstract

Electronic markets are increasingly gaining importance in the coordination of complex allocation problems. One reason for market failure is the inherent complexity excluding non-sophisticated users. Recently researchers proposed the idea of hidden market design which merges the fields of market design with user interface design in order to make complex markets accessible to a broader audience. One way to accomplish that is to simplify the market interface. Thus far it remains empirically unclear how using such interfaces affects market efficiency and individual trading performance. In a prediction market for economic variables, traders can choose between a standard trading interface, and one that hides most market complexities. We find that market participants using a simplified trading -- interface are more likely to submit profitable orders.