IDEAS home Printed from https://ideas.repec.org/p/ags/eaae17/260882.html
   My bibliography  Save this paper

The Reference Price Is Not The Limit: Analysis Of Consumer Valuations In Second-price Vickrey Auction

Author

Listed:
  • Dolgopolova, Irina
  • Teuber, Ramona
  • Roosen, Jutta

Abstract

We assess the role of perceived reference price (PRP) in consumers’ valuations for four different bread types in secondprice Vickrey auctions taking into account the presence of market substitutes. A possible censoring effect of perceived reference price is modeled using a random effects Tobit model with lower and upper thresholds. The estimates are compared to a random effects Tobit model censored at zero only. In contrast to the existing literature, our results indicate that including perceived reference price in upper threshold does not improve the model fit and thus question the role of PRP as an upper limit for auction bids.

Suggested Citation

  • Dolgopolova, Irina & Teuber, Ramona & Roosen, Jutta, 2017. "The Reference Price Is Not The Limit: Analysis Of Consumer Valuations In Second-price Vickrey Auction," 2017 International Congress, August 28-September 1, 2017, Parma, Italy 260882, European Association of Agricultural Economists.
  • Handle: RePEc:ags:eaae17:260882
    as

    Download full text from publisher

    File URL: http://ageconsearch.umn.edu/record/260882/files/The%20Reference%20Price%20Is%20Not%20The%20Limit%20Analysis%20Of%20Consumer%20Valuations%20In%20Second-price%20Vickrey%20Auction.pdf
    Download Restriction: no

    File URL: http://ageconsearch.umn.edu/record/260882/files/The%20Reference%20Price%20Is%20Not%20The%20Limit%20Analysis%20Of%20Consumer%20Valuations%20In%20Second-price%20Vickrey%20Auction.pdf?subformat=pdfa
    Download Restriction: no

    References listed on IDEAS

    as
    1. Andreas C. Drichoutis & Rodolfo M. Nayga & Panagiotis Lazaridis, 2011. "The Role of Training in Experimental Auctions," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 93(2), pages 521-527.
    2. Lusk,Jayson L. & Shogren,Jason F., 2007. "Experimental Auctions," Cambridge Books, Cambridge University Press, number 9780521671248, December.
    3. Roosen, Jutta & Fox, John A. & Hennessy, David A. & Schreiber, Alan, 1998. "Consumers' Valuation Of Insecticide Use Restrictions: An Application To Apples," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 23(2), pages 1-18, December.
    4. Frode Alfnes, 2009. "Valuing product attributes in Vickrey auctions when market substitutes are available," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 36(2), pages 133-149, June.
    5. Rousu, Matthew C. & Beach, Robert H. & Corrigan, Jay R., 2005. "Demand Curve Shifts in Multi-Unit Auctions: Evidence from a Laboratory Experiment," 2005 Annual meeting, July 24-27, Providence, RI 19513, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    6. Lusk,Jayson L. & Shogren,Jason F., 2007. "Experimental Auctions," Cambridge Books, Cambridge University Press, number 9780521855167, December.
    7. Drichoutis, Andreas C. & Lazaridis, Panagiotis & Nayga Jr., Rodolfo M., 2008. "The role of reference prices in experimental auctions," Economics Letters, Elsevier, vol. 99(3), pages 446-448, June.
    8. Glenn W. Harrison & Ronald M. Harstad & E. Elisabet Rutstr–m, 2004. "Experimental Methods and Elicitation of Values," Experimental Economics, Springer;Economic Science Association, vol. 7(2), pages 123-140, June.
    9. Bernard, John C. & He, Na, 2010. "Confounded by the Field: Bidding in Food Auctions When Field Prices Are Increasing," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 39(2), pages 1-13, April.
    10. Wuyang Hu & Wiktor L. Adamowicz & Michele M. Veeman, 2006. "Labeling Context and Reference Point Effects in Models of Food Attribute Demand," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 88(4), pages 1034-1049.
    11. Colson Gregory & Corrigan Jay R & Rousu Matthew C., 2010. "The Impact of Perceived Prices on Willingness to Pay in Experimental Auctions," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 8(1), pages 1-13, November.
    12. Bernard, John C. & He, Na, 2010. "Confounded by the Field: Bidding in Food Auctions When Field Prices Are Increasing," Agricultural and Resource Economics Review, Cambridge University Press, vol. 39(02), pages 275-287, April.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Consumer/Household Economics; Demand and Price Analysis;

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:eaae17:260882. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search). General contact details of provider: http://edirc.repec.org/data/eaaeeea.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.