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Learning Direction Theory and the Winner’s Curse Author info | Abstract | Publisher info | Download info | Related research | Statistics Reinhard Selten ()
Klaus Abbink ()
Ricarda Cox
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We report an experiment on a decision task by Samuelson and Bazerman (1985). Subjects submit a bid for an item with an unknown value. A winner’s curse phenomenon arises when subjects bid too high and make losses. Learning direction theory can account for this. However, other influences on behaviour can also be identified. We introduce impulse balance theory to make quantitative predictions on the basis of learning direction theory. We also look at monotonic ladder processes. It is shown that for this kind of Markov chains the impulse balance point is connected to the mode of the stationary distribution. Copyright Springer Science + Business Media, Inc. 2005
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Article provided by Springer in its journal Experimental Economics .
Volume (Year): 8 (2005)
Issue (Month): 1 (April)
Pages: 5-20
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Handle: RePEc:kap:expeco:v:8:y:2005:i:1:p:5-20Contact details of provider: Web page: http://www.springerlink.com/link.asp?id=102888
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Keywords: experimental economics ; learning ; individual decision making ; Other versions of this item:
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.: Selten, Reinhard & Stoecker, Rolf, 1986.
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references Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
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Papers on Strategic Interaction
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Wilfred Amaldoss & Teck-Hua Ho & Aradhna Krishna & Kay-Yut Chen & Preyas Desai & Ganesh Iyer & Sanjay Jain & Noah Lim & John Morgan & Ryan Oprea & Joydeep Srivasatava, 2008.
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Gary Charness & Dan Levin, 2005.
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Other versions:
Gary Charness & Dan Levin, 2007.
"The Origin of the Winner's Curse: A Laboratory Study ,"
University of California at Santa Barbara, Economics Working Paper Series
17-07c, Department of Economics, UC Santa Barbara.
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"24 ,"
Levine's Bibliography
122247000000000073, UCLA Department of Economics.
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