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Negative Values in Vickrey Auctions

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Author Info

  • David L. Dickinson

Abstract

Some people assign negative values for new products sold on laboratory auction blocks (i.e., irradiated meat). We explore bidding behavior in two Vickrey auctions when people have positive- and negative-induced values for the good. Aggregate bidding in the second-price auction is precise but biased—highest-value positive bidders tend to overstate benefits, whereas lowest-negative bidders understate losses. In contrast, bidding behavior in the random nth-price auction is demand revealing irrespective of induced value, but it is imprecise. Examining on- and off-margin bidding behavior, we cannot conclude that any segments of demand are significantly different than the demand revealing regression line. Copyright 2004, Oxford University Press.

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File URL: http://hdl.handle.net/10.1111/j.0092-5853.2004.00574.x
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Bibliographic Info

Article provided by Agricultural and Applied Economics Association in its journal American Journal of Agricultural Economics.

Volume (Year): 86 (2004)
Issue (Month): 1 ()
Pages: 222-235

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Handle: RePEc:oup:ajagec:v:86:y:2004:i:1:p:222-235

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Cited by:
  1. Ward, Ruby A. & Bailey, DeeVon & Jensen, Robert T., 2005. "An American BSE Crisis: Has it affected the Value of Traceability and Country-of-Origin Certifications for US and Canadian Beef?," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association (IAMA), vol. 8(02).
  2. Bernard, John C. & Zhang, Chao & Gifford, Katie, 2006. "An Experimental Investigation of Consumer Willingness to Pay for Non-GM Foods When an Organic Option Is Present," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 35(2), October.
  3. Drichoutis, Andreas & Lusk, Jayson & Nayga, Rodolfo, 2013. "The veil of experimental currency units," MPRA Paper 46906, University Library of Munich, Germany.
  4. repec:hal:cesptp:halshs-00396721 is not listed on IDEAS
  5. Vollan, Bjorn & Prediger, Sebastian & Frolich, Markus, 2010. "The influence of collective property rights on grazing management in a semi-arid region," African Journal of Agricultural and Resource Economics, African Association of Agricultural Economists, vol. 5(2), December.
  6. repec:hal:cesptp:halshs-00731244 is not listed on IDEAS
  7. Jacquemet, Nicolas & Joule, Robert-Vincent & Luchini, Stéphane & Shogren, Jason F., 2013. "Preference elicitation under oath," Journal of Environmental Economics and Management, Elsevier, vol. 65(1), pages 110-132.
  8. Jayson Lusk & Tomas Nilsson & Ken Foster, 2007. "Public Preferences and Private Choices: Effect of Altruism and Free Riding on Demand for Environmentally Certified Pork," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 36(4), pages 499-521, April.
  9. repec:hal:journl:halshs-00731244 is not listed on IDEAS
  10. repec:hal:journl:halshs-00396721 is not listed on IDEAS
  11. Han, Doo Bong & Nayga, Rodolfo M., Jr. & Lee, Ji Yong & Yoon, Jong Min, 2012. "Assessing Korean Consumers’ Valuation for Domestic and Imported Rice: Importance of Country of Origin and Food Miles Information," 2012 Annual Meeting, February 4-7, 2012, Birmingham, Alabama 119817, Southern Agricultural Economics Association.
  12. Hurley, Terrance M. & Yue, Chenyan & Anderson, Neil O., 2013. "Polarized Preferences in Homegrown Value Auctions," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 38(2), August.
  13. Feuz, Dillon M. & Umberger, Wendy J. & Calkins, Chris R. & Sitz, Bethany M., 2004. "U.S. Consumers' Willingness to Pay for Flavor and Tenderness in Steaks as Determined with an Experimental Auction," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 29(03), December.

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