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Self serving reference points in k−double auctions

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  • Husnain Fateh Ahmad

Abstract

We present a novel approach for modelling self serving bias by way of reference dependence. Bias is modelled as a systematic individual level deviation of the endogenous reference point from the expected price of a good in a two person k‐double auction. We find that bias decreases the efficiency of the model, and that efficiency is decreasing in both the level of bias and reference dependence.

Suggested Citation

  • Husnain Fateh Ahmad, 2020. "Self serving reference points in k−double auctions," Bulletin of Economic Research, Wiley Blackwell, vol. 72(1), pages 77-85, January.
  • Handle: RePEc:bla:buecrs:v:72:y:2020:i:1:p:77-85
    DOI: 10.1111/boer.12214
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    File URL: https://doi.org/10.1111/boer.12214
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    References listed on IDEAS

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    7. Stephanie Rosenkranz & Patrick W. Schmitz, 2007. "Reserve Prices in Auctions as Reference Points," Economic Journal, Royal Economic Society, vol. 117(520), pages 637-653, April.
    8. Ahmad, Husnain Fateh, 2015. "Endogenous price expectations as reference points in auctions," Journal of Economic Behavior & Organization, Elsevier, vol. 112(C), pages 46-63.
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    Cited by:

    1. Andrea Gallice, 2020. "Self-Serving Biased Reference Points in Bankruptcy Problems," Working papers 067, Department of Economics and Statistics (Dipartimento di Scienze Economico-Sociali e Matematico-Statistiche), University of Torino.

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