Customers participate in decision making, and get information from the market to update their expectations to the final product. In this part of the dissertation, a series of experiments will be run for a firm s initial investment decision in order to determine which proposed products should be initially invested. The proposed product can be viewed as a local public good within the firm, because each marketing group can get access to the final product once it has been created. In order to test whether different incentive compatible mechanisms and auction mechanisms can cure the free-rider problem, we ran three types of public good auction markets and tested the following hypothesis. Whether the incentive compatible mechanism designed in the paper solved the free-rider problem.
Competition increases the willingness to pay.
Seal-bid English Auction design increases the willingness to pay. The experiment will invite undergraduate students who have a background in the public good literature and sufficient computer skill. The experiment will be conducted in the Center of Electronic Commerce, a classroom environment.