David M. Grether

Frank J. Gilloon Professor of Economics, Emeritus
B.S., University of California, 1960; Ph.D., Stanford University, 1969. Associate Professor, Caltech, 1970-75; Professor, 1975-2009; Gilloon Professor, 2009-10; Gilloon Professor, Emeritus, 2010-. Executive Officer for Social Sciences, 1978-82; Chairman, Division of the Humanities and Social Sciences, 1982-92; Interim Chair, Division of the Humanities and Social Sciences, 2006-07.

For many years the general focus of my research has been on individual decision making. Much of the work has been experimental using various techniques including laboratory experiments both computerized and pencil and paper type exercises. One study utilized brain scanning. The populations of subjects used have been rather diverse using mainly students from a variety of two and four year colleges as well as working adults and retired people. A concern has been the heterogeneity of decision strategies across individuals and over time. This shows the endogeneity of strategies adopted.

A current set of projects covers behavior of buyers and sellers in wholesale automobile auctions. This work began with an experiment (joint with Charles Plott) in which a major bank allowed us to experiment with the order in which their vehicles arrived at the auction stand. The analysis of the data from this experiment (covering sixteen auctions and over 1700 vehicles from this one seller) showed that the single worst sequence (in terms of sales price) is ordering the vehicles monotonically from high value to low. Current research looks at the strategies used by participants, networking (attending several auction sites) and dynamics as strategies change over time and vehicles may be auctioned more than once over time and moved from one site to another.

Selected Publications 

"Mental Processes and Strategic Equilibration: An fMRI Study of Selling Strategies in Second Price Auctions" with C. Plott, D. Rowe, M. Sereno and J. Allman Experimental Economics Vol. 10 (2007) pp. 105-122

Sequencing strategies in large, competitive, ascending price automobile auctions: An experimental study with Charles R. PlottĀ  Journal of Economic Behavior and Organization Vol. 71 (2009) pp.75-88 http://dx.doi.org/10.1016/j.jebo.2009.02.018

The preference reversal phenomenon: Response mode, markets and incentives, with James Cox. Economic Theory 7 (1996): 387-405.

Individual behavior and market performance. American Journal of Agricultural Economics 76 (1994): 1079--1083.

Are people Bayesian? Uncovering behavioral strategies, with Mahmoud A. El-Gamal. Journal of the American Statistical Association 90 (1995): 1127-1145.

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