A pseudo-endowment effect in internet auctions
AbstractAlthough bidders in an internet auction do not obtain the actual ownership of the item during the auction, they still act according to an endowment eﬀect. In a unique data set of 17,000 Danish furniture auctions I ﬁnd that having the leading bid, both in terms of time and dollars, will aﬀect the bidders probability to rebid if outbid. Thus, expectations to own, i.e. “pseudo-endowment ”, seem to aﬀect bidders’ willingness to pay in a relative fast and straightforward manor. Gener- ally, these data therefore support that the reference point, from which we measure losses and gains, is closely related to expectations.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 14813.
Date of creation: Mar 2008
Date of revision:
Internet auctions; Reference-Dependent Preferences; Endowment Eﬀect; bidding behavior; eBay; WTP; Reference Point;
Find related papers by JEL classification:
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
- D4 - Microeconomics - - Market Structure and Pricing
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