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The effects of induced mood on bidding in random nth-price auctions

  • Capra, C. Monica
  • Lanier, Kelli F.
  • Meer, Shireen

In this paper we study whether mood affects: 1) Willingness to pay (WTP); and 2) The effectiveness of the demand revealing mechanism. We study decisions using a random nth price auction with induced values and homegrown values. Our data show no clear support for negative mood effects on WTP and, under some conditions, they show weak support for positive mood effects on WTP. However, mood does affect the effectiveness of the value elicitation mechanism in revealing value. Under a good mood, subjects submit bids that are significantly higher than their induced values.

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Article provided by Elsevier in its journal Journal of Economic Behavior & Organization.

Volume (Year): 75 (2010)
Issue (Month): 2 (August)
Pages: 223-234

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Handle: RePEc:eee:jeborg:v:75:y:2010:i:2:p:223-234
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  1. Rabin, Matthew, 1993. "Incorporating Fairness into Game Theory and Economics," American Economic Review, American Economic Association, vol. 83(5), pages 1281-1302, December.
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  8. Glenn W. Harrison & Ronald M. Harstad & E. Elisabet Rutstr–m, 2004. "Experimental Methods and Elicitation of Values," Experimental Economics, Springer, vol. 7(2), pages 123-140, 06.
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  12. Hanemann, W Michael, 1991. "Willingness to Pay and Willingness to Accept: How Much Can They Differ?," American Economic Review, American Economic Association, vol. 81(3), pages 635-47, June.
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