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Self serving reference points in k−double auctions

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  • Husnain Fateh Ahmad

Abstract

We present a novel approach for modelling self serving bias by way of reference dependence. Bias is modelled as a systematic individual level deviation of the endogenous reference point from the expected price of a good in a two person k‐double auction. We find that bias decreases the efficiency of the model, and that efficiency is decreasing in both the level of bias and reference dependence.

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  • Husnain Fateh Ahmad, 2020. "Self serving reference points in k−double auctions," Bulletin of Economic Research, Wiley Blackwell, vol. 72(1), pages 77-85, January.
    • Handle: RePEc:bla:buecrs:v:72:y:2020:i:1:p:77-85
    DOI: 10.1111/boer.12214
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    References listed on IDEAS

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    Cited by:

    1. Andrea Gallice, 2020. "Self-Serving Biased Reference Points in Bankruptcy Problems," Working papers 067, Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino.

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