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

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  • 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.

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  • 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
    DOI: 10.22004/ag.econ.260882
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    References listed on IDEAS

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    Keywords

    Consumer/Household Economics; Demand and Price Analysis;

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