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Revisiting Cash Endowment and House Money Effects in an Experimental Auction of a Novel Agri-food Product in the Philippines

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  • Dinah Pura T. Depositario
  • Rodolfo M. Nayga Jr
  • Yu Yvette Zhang
  • Robert Dominick E. Mariano

Abstract

type="main"> This study explores the effect of varying cash endowments on bidding behavior in auction experiments conducted in a developing country. Our results suggest that cash endowment levels can have different effects on bidding behavior under second price auction and random nth price auction. In contrast to past studies conducted in developed countries, we generally do not see the presence of positive house money effect in our results. If behavior varies significantly as the cash endowment is varied, then care must be taken when designing auction experiments or when comparing results to other experimental results and theoretical predictions.

Suggested Citation

  • Dinah Pura T. Depositario & Rodolfo M. Nayga Jr & Yu Yvette Zhang & Robert Dominick E. Mariano, 2014. "Revisiting Cash Endowment and House Money Effects in an Experimental Auction of a Novel Agri-food Product in the Philippines," Asian Economic Journal, East Asian Economic Association, vol. 28(2), pages 201-215, June.
    • Handle: RePEc:bla:asiaec:v:28:y:2014:i:2:p:201-215
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    Cited by:

    1. Sarah N. Gatson & Marissa Cisneros & Robert Brown & Jacqueline A. Aitkenhead-Peterson & Yu Yvette Zhang, 2022. "Urban Networks, Micro-agriculture, and Community Food Security," Circular Economy and Sustainability, Springer, vol. 2(3), pages 1253-1265, September.
    2. Yu Yvette Zhang & Rodolfo M Nayga Jr. & Dinah Pura T Depositario, 2019. "Learning and the possibility of losing own money reduce overbidding: Delayed payment in experimental auctions," PLOS ONE, Public Library of Science, vol. 14(5), pages 1-19, May.

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