| Information Technology (IT) has spawned the growth of novel and innovative market mechanisms (such as online auctions) and associated businesses (such as eBay and Priceline) that were not feasible without the capabilities and reach of these modern information technologies. Previous studies on designing trading mechanisms for online markets primarily viewed them from an economic perspective. There has been virtually no study on how making changes to a mechanism alters its desirability as a mechanism or endogenously affects the behavior of its users. This dissertation takes a holistic look at the issue of designing mechanisms: exploring not only the economic properties of a mechanism but also the dimensions of user acceptance and of user behavior and its impact on the mechanism's performance. We take a multidisciplinary approach, using theories from economics, decision psychology and computer science. We employ laboratory experiments to collect primary data and use well-established methodologies in experimental economics to analyze the data; in addition, we use perceptual methodologies (such as the Technology Acceptance Model) to study the issues related to user acceptance and exploratory data analysis techniques to discover and explore emerging behaviors as features of the mechanism are changed. The combinatorial auction is the context for this study. It is a complex mechanism, where the role of IT in facilitating a user's interaction with the mechanism is abundantly clear. Furthermore, while the mechanism has been used for important resource allocation decisions in industry, its use in the online marketplace is limited, if not non existent. Therefore, the issues of the mechanism's economic adequacy and user acceptance are both of relevance. We find that the design of the mechanism significantly influences not only the economic properties of the mechanism but also its user perceptions. Furthermore, unlike in single-item auctions, in combinatorial auctions bidders are able to generate greater surplus with more transparency of the mechanism. Based on our results, we develop several insights on designing sustainable economic mechanisms.;Keywords: Mechanism Design, Combinatorial Auctions, Information Feedback, User Acceptance of Technology, Bidder Behavior. |
