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Earned Wealth, Engaged Bidders? Evidence from a second price auction

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Author Info

  • Nicolas Jacquemet

    ()
    (CES - Centre d'économie de la Sorbonne - CNRS : UMR8174 - Université Paris I - Panthéon-Sorbonne, EEP-PSE - Ecole d'Économie de Paris - Paris School of Economics - Ecole d'Économie de Paris)

  • Stephane Luchini

    ()
    (GREQAM - Groupement de Recherche en Économie Quantitative d'Aix-Marseille - Université de la Méditerranée - Aix-Marseille II - Université Paul Cézanne - Aix-Marseille III - École des Hautes Études en Sciences Sociales (EHESS) - CNRS : UMR6579)

  • Robert-Vincent Joule

    ()
    (LPS-AIX - Laboratoire de Psychologie Sociale - Université de Provence - Aix-Marseille I : EA849)

  • Jason Shogren

    ()
    (Departement Economy and Finance, University of Wyoming - University of Wyoming)

Abstract

Recent work in experimental economics has explored whether observed behavior depends on whether wealth was windfall or earned. This paper extends this work by considering whether earned wealth ffects bidding behavior in an induced-value second-price auction. We find people bid more sincerely in the auction with earned wealth given monetary incentives; earned wealth did not induce sincere bidding in hypothetical auctions.

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Bibliographic Info

Paper provided by HAL in its series Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) with number halshs-00277283.

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Date of creation: 06 May 2008
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Handle: RePEc:hal:cesptp:halshs-00277283

Note: View the original document on HAL open archive server: http://halshs.archives-ouvertes.fr/halshs-00277283
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Related research

Keywords: Auctions; Demand revelation; Experimental valuation; Hypothetical bias; Earned Money;

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References

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  1. Glenn Harrison, 2007. "House money effects in public good experiments: Comment," Experimental Economics, Springer, Springer, vol. 10(4), pages 429-437, December.
  2. Nicolas Jacquemet & Robert-Vincent Joule & Stephane Luchini & Jason Shogren, 2013. "Preference Elicitation under Oath," PSE - Labex "OSE-Ouvrir la Science Economique", HAL halshs-00731244, HAL.
  3. Jeremy Clark, 2002. "House Money Effects in Public Good Experiments," Experimental Economics, Springer, Springer, vol. 5(3), pages 223-231, December.
  4. Jeremy Clark, 1998. "Fairness in Public Good Provision: An Investigation of Preferences for Equality and Proportionality," Canadian Journal of Economics, Canadian Economics Association, Canadian Economics Association, vol. 31(3), pages 708-729, August.
  5. Rutstrom, E. Elisabet & Williams, Melonie B., 2000. "Entitlements and fairness:: an experimental study of distributive preferences," Journal of Economic Behavior & Organization, Elsevier, Elsevier, vol. 43(1), pages 75-89, September.
  6. Todd L. Cherry & Peter Frykblom & Jason F. Shogren, 2002. "Hardnose the Dictator," American Economic Review, American Economic Association, American Economic Association, vol. 92(4), pages 1218-1221, September.
  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. Richard H. Thaler & Eric J. Johnson, 1990. "Gambling with the House Money and Trying to Break Even: The Effects of Prior Outcomes on Risky Choice," Management Science, INFORMS, INFORMS, vol. 36(6), pages 643-660, June.
  9. Nicolas Jacquemet & Stephane Luchini & Robert-Vincent Joule & Jason Shogren, 2008. "Do French student really bid sincerely?," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00277282, HAL.
  10. Todd L. Cherry & Stephan Kroll & Jason F. Shogren, 2003. "The Impact of Endowment Heterogeneity and Origin on Public Good Contributions: Evidence from the Lab," Working Papers, Department of Economics, Appalachian State University 03-05, Department of Economics, Appalachian State University.
  11. Greiner, Ben, 2004. "An Online Recruitment System for Economic Experiments," MPRA Paper 13513, University Library of Munich, Germany.
  12. repec:hal:wpaper:halshs-00277282 is not listed on IDEAS
  13. William Vickrey, 1961. "Counterspeculation, Auctions, And Competitive Sealed Tenders," Journal of Finance, American Finance Association, American Finance Association, vol. 16(1), pages 8-37, 03.
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Citations

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Cited by:
  1. repec:hal:journl:halshs-00731244 is not listed on IDEAS
  2. Jacquemet, Nicolas & Joule, Robert-Vincent & Luchini, Stéphane & Shogren, Jason F., 2011. "Do People Always Pay Less Than They Say? Testbed Laboratory Experiments With IV and HG Values," Economics Papers from University Paris Dauphine 123456789/9717, Paris Dauphine University.
  3. Nicolas Jacquemet & Robert-Vincent Joule & Stephane Luchini & Jason Shogren, 2009. "Preference Elicitation under Oath," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00396721, HAL.
  4. Dominique Ami & Frédéric Aprahamian & Olivier Chanel & Stéphane Luchini, 2011. "A Test of Cheap Talk in Different Hypothetical Contexts: The Case of Air Pollution," Environmental & Resource Economics, European Association of Environmental and Resource Economists, European Association of Environmental and Resource Economists, vol. 50(1), pages 111-130, September.
  5. Nicolas Jacquemet & Alexander James & Stephane Luchini & Jason Shogren, 2011. "Social psychology and environmental economics: a new look at ex ante corrections of biased preference evaluation," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00584247, HAL.
  6. Nicolas Jacquemet & Adam Zylbersztejn, 2011. "What drives failure to maximize payoffs in the lab? A test of the inequality aversion hypothesis," Documents de travail du Centre d'Economie de la Sorbonne, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne 11036, Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne.
  7. repec:hal:journl:halshs-00462193 is not listed on IDEAS
  8. Nicolas Jacquemet & Robert-Vincent Joule & Stephane Luchini & Jason Shogren, 2013. "Preference Elicitation under Oath," PSE - Labex "OSE-Ouvrir la Science Economique", HAL halshs-00731244, HAL.
  9. Curtis R. Price & Roman M. Sheremeta, 2012. "Endowment Origin, Demographic Effects and Individual Preferences in Contests," Working Papers, Chapman University, Economic Science Institute 12-07, Chapman University, Economic Science Institute.
  10. repec:hal:cesptp:halshs-00731244 is not listed on IDEAS
  11. Samuel Ferey & Yannick Gabuthy & Nicolas Jacquemet, 2013. "L'apport de l'économie expérimentale dans l'élaboration des politiques publiques," PSE - Labex "OSE-Ouvrir la Science Economique", HAL halshs-00879205, HAL.
  12. repec:hal:journl:halshs-00584247 is not listed on IDEAS
  13. repec:hal:journl:halshs-00879205 is not listed on IDEAS
  14. repec:hal:journl:halshs-00611696 is not listed on IDEAS

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