The loser's bliss in auctions with price externality
type: Item
instance of: scholarly article
title: The loser's bliss in auctions with price externality
zbMATH Open document ID: 1404.91122
author: Peter T. L. Popkowski Leszczyc
author: Ernan E. Haruvy
published in: Games
publication date: 2018-07-10T00:00:00Z
review text: Summary: We consider auctions with price externality where all bidders derive utility from the winning price, such as charity auctions. In addition to the benefit to the winning bidder, all bidders obtain a benefit that is increasing in the winning price. Theory makes two predictions in such settings: First, individual bids will be increasing in the multiplier on the winning price. Second, individual bids will not depend on the number of other bidders. Empirically, we find no evidence that increasing the multiplier increases individual bids in a systematic way, but we find that increasing the number of bidders does. An analysis of individual bidding functions reveals that bidders underweight the incentives to win and overweight the incentives to lose.
Mathematics Subject Classification ID: 91B26
Mathematics Subject Classification ID: 91A90
zbMATH DE Number: 6900973
zbMATH Keywords: auctions with price externality
zbMATH Keywords: bidder aggression
zbMATH Keywords: underbidding
zbMATH Keywords: experiments
describes a project that uses: Z-Tree
MaRDI profile type: Publication
full work available at URL: g6030191
OpenAlex ID: W1554333118
cites work: Auctions with price-proportional benefits to bidders
cites work: Do preferences for charitable giving help auctioneers?
cites work: Charitable Motives and Bidding in Charity Auctions
cites work: An experimental test of alternative models of bidding in ascending auctions
DOI: 10.3390/G6030191
description: scientific article; zbMATH DE number 6900973