IDEAS home Printed from https://ideas.repec.org/p/bon/boncrc/crctr224_2021_313.html
   My bibliography  Save this paper

English Versus Vickrey Auctions With Loss-Averse Bidders

Author

Listed:
  • Jonas von Wangenheim

Abstract

Evidence suggests that people evaluate outcomes relative to expectations. I analyze this expectations-based loss aversion à la Köszegi and Rabin in the context of dynamic and static auctions, where the reference point is given by the (endogenous) equilibrium outcome. If agents update their reference point during the auction, the arrival of information crucially affects equilibrium behavior. Consequently, I show that - even with independent private values - the Vickrey auction yields strictly higher revenue than the (ascending clock) English auction, violating the well-known revenue equivalence.

Suggested Citation

  • Jonas von Wangenheim, 2021. "English Versus Vickrey Auctions With Loss-Averse Bidders," CRC TR 224 Discussion Paper Series crctr224_2021_313, University of Bonn and University of Mannheim, Germany.
    • Handle: RePEc:bon:boncrc:crctr224_2021_313
    as

    Download full text from publisher

    File URL: https://www.crctr224.de/research/discussion-papers/archive/dp313
    Download Restriction: no
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Vincent Meisner & Jonas von Wangenheim, 2022. "Loss aversion in strategy-proof school-choice mechanisms," Papers 2207.14666, arXiv.org.
    2. Rosato, Antonio, 2023. "Loss aversion in sequential auctions," Theoretical Economics, Econometric Society, vol. 18(2), May.
    3. Meisner, Vincent & von Wangenheim, Jonas, 2023. "Loss aversion in strategy-proof school-choice mechanisms," Journal of Economic Theory, Elsevier, vol. 207(C).

    More about this item

    Keywords

    Vickrey auction; English auction; Japanese auction; expectationsbased loss aversion; revenue equivalence; dynamic loss aversion; personal equilibrium;
    All these keywords.

    JEL classification:

    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bon:boncrc:crctr224_2021_313. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CRC Office (email available below). General contact details of provider: https://www.crctr224.de .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.