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Decision-making in Home-grown Value Auctions under Induced Mood States

Author

Listed:
  • Andreas C. Drichoutis
  • Rodolfo M. Nayga Jr.
  • Stathis Klonaris

Abstract

This article contributes to the research agenda of accommodating psychological insights in conventional lab experiments. We specifically test whether inducing subjects into different mood states has a significant effect on subjects’ rationality (in the form of preference reversals) and on bidding behaviour in home-grown value auctions. We find that mood states can significantly affect the rate of preference reversals and bidding behaviour in experimental auction valuation. Specifically we find that subjects under a positive mood state exhibit more rational behaviour (i.e., less preference reversals) and provide lower bid values than others.

Suggested Citation

  • Andreas C. Drichoutis & Rodolfo M. Nayga Jr. & Stathis Klonaris, 2014. "Decision-making in Home-grown Value Auctions under Induced Mood States," Studies in Microeconomics, , vol. 2(2), pages 141-163, December.
    • Handle: RePEc:sae:miceco:v:2:y:2014:i:2:p:141-163
    DOI: 10.1177/2321022214545270
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