Robustness Of Bidder Preferences Among Auction Institutions
Abstract"In previous work, we found that bidders strongly prefer the ascending to the first-price sealed-bid auction on a ceteris paribus basis, but perhaps surprisingly, they are not willing to pay up to an entry price for the ascending auction that would equalize the profits. Risk aversion was proposed as an explanation. In this study, we examine two alternative explanations for the observed behavior: loss aversion and aversion to the dynamic bidding process. We find that neither alternative explanation can account for bidders' auction choice behavior, leaving risk aversion as the only unfalsified hypothesis. "("JEL "C91, D44) Copyright (c) 2008 Western Economic Association International.
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Bibliographic InfoArticle provided by Western Economic Association International in its journal Economic Inquiry.
Volume (Year): 46 (2008)
Issue (Month): 3 (07)
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Find related papers by JEL classification:
- C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
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- Ivanova-Stenzel, Radosveta & Salmon, Timothy C., 2011.
"The high/low divide: Self-selection by values in auction choice,"
Games and Economic Behavior,
Elsevier, vol. 73(1), pages 200-214, September.
- Radosveta Ivanova-Stenzel & Timothy Salmon, 2009. "The High/Low Divide: Self-Selection by Values in Auction Choice," Working Papers wp2009_06_02, Department of Economics, Florida State University.
- Ivanova-Stenzel, Radosveta & Salmon, Timothy C., 2010. "The High/Low Divide: Self- Selection by Values in Auction Choice," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 295, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Couture, Stéphane & Reynaud, Arnaud, 2010.
"Stability of Risk Preference Measures: Results from a Field Experiment on French Farmers,"
TSE Working Papers
10-151, Toulouse School of Economics (TSE).
- Arnaud Reynaud & Stéphane Couture, 2012. "Stability of risk preference measures: results from a field experiment on French farmers," Theory and Decision, Springer, vol. 73(2), pages 203-221, August.
- Arnaud Reynaud & Stephane Couture, 2010. "Stability of Risk Preference Measures: Results From a Field Experiment on French Farmers," LERNA Working Papers 10.10.316, LERNA, University of Toulouse.
- Ertaç, Seda & Hortaçsu, Ali & Roberts, James W., 2011. "Entry into auctions: An experimental analysis," International Journal of Industrial Organization, Elsevier, vol. 29(2), pages 168-178, March.
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