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Auctions with Anticipated Regret Author info | Abstract | Publisher info | Download info | Related research | Statistics Emel Filiz (Columbia University, Economics Department)
Erkut Y. Ozbay (New York University, Economics Department)
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This paper demonstrates theoretically and experimentally that in first price auctions, overbidding with respect to risk neutral Nash equilibrium might be driven from anticipated loser regret (felt when bidders lose at an affordable price). Different information structures are created to elicit regret: bidders know they will learn the winning bid if they lose (loser regret condition); or the second highest bid if they win (winner regret condition); or no information regarding the other bids. Bidders only in loser regret condition anticipated regret and significantly overbid; in the other conditions bidders did not anticipate regret and hence did not overbid.
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Paper provided by EconWPA in its series Experimental with number
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Length: 39 pages
Date of creation: 19 Nov 2005Date of revision:
Handle: RePEc:wpa:wuwpex:0511006Note: Type of Document - pdf; pages: 39Contact details of provider: Web page: http://129.3.20.41
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Keywords: overbidding ; first price auction ; anticipated regret ; Other versions of this item:
Find related papers by JEL classification: D44 - Microeconomics - - Market Structure and Pricing - - - Auctions C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
This paper has been announced in the following NEP Reports :
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.: Jehiel, Phillipe & Moldovanu, Benny, 1998.
"Efficient Design with Interdependent Valuations ,"
Sonderforschungsbereich 504 Publications
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Other versions:
Jehiel, Phillipe & Moldovanu, Benny, 1999.
"Efficient Design with Interdependent Valuations ,"
Sonderforschungsbereich 504 Publications
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Other versions:
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Virginia Economics Online Papers
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Ritov, Ilana, 1996.
"Probability of Regret: Anticipation of Uncertainty Resolution in Choice ,"
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Cox, James C & Smith, Vernon L & Walker, James M, 1988.
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Journal of Risk and Uncertainty ,
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Other versions: Jehiel, Philippe & Moldovanu, Benny & Stacchetti, Ennio, 1999.
"Multidimensional Mechanism Design for Auctions with Externalities ,"
Journal of Economic Theory ,
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[Downloadable!] (restricted)
Other versions: Kagel, J.H. & Levin, D., 1988.
"Independent Private Value Auctions: Bidder Behavior In First, Second And Third-Price Auctions With Varying Numbers Of Bidders ,"
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[Downloadable!]
Merlo, Antonio & Schotter, Andrew, 1992.
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Harrison, Glenn W, 1989.
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[Downloadable!] (restricted)
Kagel, John H & Roth, Alvin E, 1992.
"Theory and Misbehavior in First-Price Auctions: Comment ,"
American Economic Review ,
American Economic Association, vol. 82(5), pages 1379-91, December.
[Downloadable!] (restricted)
Full
references Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
Roider, Andreas & Schmitz, Patrick W., 2007.
"Auctions with Anticipated Emotions: Overbidding, Underbidding, and Optimal Reserve Prices ,"
CEPR Discussion Papers
6476, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted)
Dirk Bergemann & Karl Schlag, 2005.
"Robust Monopoly Pricing ,"
Cowles Foundation Discussion Papers
1527R, Cowles Foundation, Yale University, revised Apr 2007.
[Downloadable!]
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