Getting Carried Away in Auctions as Imperfect Value Discovery
Bidders have to decide whether and when to incur the cost of estimating their own values in auctions. This can explain why people seem to get carried away, bidding higher than they had planned before the auction and then finding they had paid more than the object was worth to them. Even when such behavior is rational, ex ante, it may be perceived as irrational if one ignores other situations in which people revise their bid ceilings upwards and are happy when that enables them to win the auction.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- John Asker, 2000. "Bidding up, buying out and cooling-off: an examination of auctions with withdrawal rights," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 16(3), pages 585-611.
- Eric Rasmusen, 2004. "When Does Extra Risk Strictly Increase the Value of Options?," Finance 0409004, EconWPA.
- Eric B. Rasmusen, 2001.
"Starategic Implications of Uncertainty Over One's Own Private Value in Auctions,"
CIRJE-F-127, CIRJE, Faculty of Economics, University of Tokyo.
- Rasmusen Eric Bennett, 2006. "Strategic Implications of Uncertainty over One's Own Private Value in Auctions," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 6(1), pages 1-22, November.
- Eric Rasmusen, 2004. "Strategic Implications of Uncertainty Over One’s Own Private Value in Auctions," Working Papers 2004-13, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
- Nicola Persico, 2000.
"Information Acquisition in Auctions,"
Econometric Society, vol. 68(1), pages 135-148, January.
- Jeremy Bulow & Paul Klemperer, 1999.
"Prices and the Winner's Curse,"
Game Theory and Information
- Alvin E. Roth & Axel Ockenfels, 2002.
"Last-Minute Bidding and the Rules for Ending Second-Price Auctions: Evidence from eBay and Amazon Auctions on the Internet,"
American Economic Review,
American Economic Association, vol. 92(4), pages 1093-1103, September.
- Alvin E. Roth & Axel Ockenfels, "undated". "Last-Minute Bidding and the Rules for Ending Second-Price Auctions: Evidence from eBay and Amazon Auctions on the Internet," Papers on Strategic Interaction 2002-32, Max Planck Institute of Economics, Strategic Interaction Group.
- Rasmusen Eric Bennett, 2001. "Explaining Incomplete Contracts as the Result of Contract-Reading Costs," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 1(1), pages 1-39, October.
When requesting a correction, please mention this item's handle: RePEc:wpa:wuwpio:0409001. 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: (EconWPA)
If references are entirely missing, you can add them using this form.