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Bidding behavior in experimental auctions with positive and negative values

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  • Lee, Ji Yong
  • Fox, John A. (Sean)

Abstract

We test for consistency between bids from endowment auctions that allow positive or negative bids for an exchange between two items, and bids from prior full bidding auctions for the same items. Results suggest that positive WTP bids in the endowment auction are demand revealing but subjects overbid (in absolute value) their negative WTA values. WTA bids were lower in a random nth price auction than in a 5th price auction.

Suggested Citation

  • Lee, Ji Yong & Fox, John A. (Sean), 2015. "Bidding behavior in experimental auctions with positive and negative values," Economics Letters, Elsevier, vol. 136(C), pages 151-153.
    • Handle: RePEc:eee:ecolet:v:136:y:2015:i:c:p:151-153
    DOI: 10.1016/j.econlet.2015.09.013
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    References listed on IDEAS

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    1. Dickinson, David L. & Bailey, DeeVon, 2002. "Meat Traceability: Are U.S. Consumers Willing To Pay For It?," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 27(2), pages 1-17, December.
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    Cited by:

    1. Lee, Ji Yong & Fox, John A., 2016. "The effects of allowing substitutes on bidding behavior in a private value experimental auction," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 235900, Agricultural and Applied Economics Association.
    2. Maurizio Canavari & Andreas C. Drichoutis & Jayson L. Lusk & Rodolfo M. Nayga, Jr., 2018. "How to run an experimental auction: A review of recent advances," Working Papers 2018-5, Agricultural University of Athens, Department Of Agricultural Economics.

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    More about this item

    Keywords

    Experimental auctions; Negative values; Strategic bidding;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior

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