Advanced Search
MyIDEAS: Login to save this article or follow this journal

Evidence of affiliation of values in a repeated trial auction experiment

Contents:

Author Info

  • John Bernard

Abstract

Most auction experiments designed to determine subjects' values use repeated trials. This is primarily to give subjects a chance to understand the auction and to learn from market feedback. However, concerns exist that repetition could lead to affiliation of values with subjects following final prices over trials. This could be especially true for items consumers are unfamiliar with. To test these hypotheses, the current research employed repeated auction trials for conventional, organic, and non-GM chocolate bars, with each respectively considered less familiar to subjects. The auction results were first analysed to determine whether the premiums, calculated as the differences in bids between bar types, were statistically significant over each trial. A tobit regression analysis was then conducted to determine which factors statistically influenced premiums over each trial. Analysis showed that the premium for the non-GM bar over the conventional and most of the factors explaining the premiums in the first trial became insignificant after repetition. This suggested strong evidence of affiliation and demonstrated how it can lead to loss of information about subjects' initial formulation of values. It is recommended that, depending on the focus of the study, single trials should be used to avoid these problems.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.informaworld.com/openurl?genre=article&doi=10.1080/13504850500181823&magic=repec&7C&7C8674ECAB8BB840C6AD35DC6213A474B5
Download Restriction: Access to full text is restricted to subscribers.

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Taylor & Francis Journals in its journal Applied Economics Letters.

Volume (Year): 12 (2005)
Issue (Month): 11 ()
Pages: 687-691

as in new window
Handle: RePEc:taf:apeclt:v:12:y:2005:i:11:p:687-691

Contact details of provider:
Web page: http://www.tandfonline.com/RAEL20

Order Information:
Web: http://www.tandfonline.com/pricing/journal/RAEL20

Related research

Keywords:

References

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.:
as in new window
  1. Harrison, Glen W. & Ronald M. Harstad & E. Elisabet Rutström, 1995. "Experimental Methods and Elicitation of Values," Discussion Paper Serie B 349, University of Bonn, Germany.
  2. Shogren, Jason F. & Seung Y. Shin & Dermot J. Hayes & James B. Kliebenstein, 1994. "Resolving Differences in Willingness to Pay and Willingness to Accept," American Economic Review, American Economic Association, vol. 84(1), pages 255-70, March.
  3. Jack Knetsch & Fang-Fang Tang & Richard Thaler, 2001. "The Endowment Effect and Repeated Market Trials: Is the Vickrey Auction Demand Revealing?," Experimental Economics, Springer, vol. 4(3), pages 257-269, December.
  4. Paul Milgrom & Robert J. Weber, 1981. "A Theory of Auctions and Competitive Bidding," Discussion Papers 447R, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  5. Frode Alfnes & Kyrre Rickertsen, 2003. "European Consumers' Willingness to Pay for U.S. Beef in Experimental Auction Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(2), pages 396-405.
  6. John A. List & Jason F. Shogren, 1999. "Price Information and Bidding Behavior in Repeated Second-Price Auctions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 81(4), pages 942-949.
Full references (including those not matched with items on IDEAS)

Citations

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

Cited by:
  1. Nicholas Shunda, 2007. "Auctions with a Buy Price: The Case of Reference-Dependent Preferences," Working papers 2007-42, University of Connecticut, Department of Economics.
  2. Bernard, John C. & Bernard, Daria J., 2010. "Comparing Parts with the Whole: Willingness to Pay for Pesticide-Free, Non-GM, and Organic Potatoes and Sweet Corn," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 35(3), December.
  3. Valle, Haydn & Capon, Timothy & Harris, Michael & Reeson, Andrew, 2012. "Coordination and Strategic Behaviour in Landscape Auctions," 2012 Conference (56th), February 7-10, 2012, Freemantle, Australia 124466, Australian Agricultural and Resource Economics Society.
  4. He, Na & Bernard, John C., 2011. "Differences in WTP and Consumer Demand for Organic and Non-GM Fresh and Processed Foods," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 40(2), August.
  5. Rolfe, John & Windle, Jill, 2006. "Using Field Experiments to Explore the Use of Multiple Bidding Rounds in Conservation Auctions," Discussion Papers 25801, International Association of Agricultural Economists.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:taf:apeclt:v:12:y:2005:i:11:p:687-691. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty).

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.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with 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 profile, as there may be some citations waiting for confirmation.

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