A pseudo-endowment effect in internet auctions
Although bidders in an internet auction do not obtain the actual ownership of the item during the auction, they still act according to an endowment eﬀect. In a unique data set of 17,000 Danish furniture auctions I ﬁnd that having the leading bid, both in terms of time and dollars, will aﬀect the bidders probability to rebid if outbid. Thus, expectations to own, i.e. “pseudo-endowment ”, seem to aﬀect bidders’ willingness to pay in a relative fast and straightforward manor. Gener- ally, these data therefore support that the reference point, from which we measure losses and gains, is closely related to expectations.
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- Bramsen, Jens-Martin, 2008. "Bid early and get it cheap - Timing effects in Internet auctions," MPRA Paper 14811, University Library of Munich, Germany.
- John A. List, 2003. "Does Market Experience Eliminate Market Anomalies?," The Quarterly Journal of Economics, Oxford University Press, vol. 118(1), pages 41-71.
- Botond Kőszegi & Matthew Rabin, 2006. "A Model of Reference-Dependent Preferences," The Quarterly Journal of Economics, Oxford University Press, vol. 121(4), pages 1133-1165.
- Ulrike Malmendier & Young Han Lee, 2011.
"The Bidder's Curse,"
American Economic Review,
American Economic Association, vol. 101(2), pages 749-87, April.
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