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Strategic bidding in a private value experimental auction with positive and negative bids

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

Abstract

We treat a difference in initial bids for two private goods as an endogenous “induced” value. Results from follow up auctions eliciting positive or negative bids to exchange one good for the other suggest that positive WTP bids are demand revealing while subjects tended to overbid (in absolute value) negative WTA values. Controlling for risk attitude in WTA bids is shown to partially explain the WTA overbidding. WTA bids tended to be lower in a random nth price auction compared to those elicited in a 5th price auction.

Suggested Citation

  • Lee, Ji Yong & Fox, John A. (Sean), 2015. "Strategic bidding in a private value experimental auction with positive and negative bids," 2015 AAEA & WAEA Joint Annual Meeting, July 26-28, San Francisco, California 204984, Agricultural and Applied Economics Association.
    • Handle: RePEc:ags:aaea15:204984
    DOI: 10.22004/ag.econ.204984
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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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    5. David L. Dickinson, 2004. "Negative Values in Vickrey Auctions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 86(1), pages 222-235.
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    Cited by:

    1. 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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