Experiments with probabilistic quantum auctions

Abstract

We describe human-subject laboratory experiments on probabilistic auctions based on previously proposed auction protocols involving the simulated manipulation and communication of quantum states. These auctions are probabilistic in determining which bidder wins, or having no winner, rather than always having the highest bidder win. Comparing two quantum protocols in the context of first-price sealed bid auctions, we find the one predicted to be superior by game theory also performs better experimentally. We also compare with a conventional first-price auction, which gives higher performance. Thus to provide benefits, the quantum protocol requires more complex economic scenarios such as maintaining privacy of bids over a series of related auctions or involving allocative externalities.