Understanding overbidding in second price auctions:An experimental study

Cooper, D.J. and Fang, H. (2008) Understanding overbidding in second price auctions:An experimental study. The Economic Journal, 118 (532). pp. 1572-1595. ISSN 0013-0133

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Abstract

We present results from second price private value auction (SPA) experiments where bidders may receive noisy signals about their opponents' value. Such signals change bidders' perception about the 'strength' of their opponent, and the relationship between bidders' perception of their opponent and overbidding provides a novel channel to understand overbidding in SPA. We found that small and medium overbids are more likely to occur when bidders perceive their rivals to have similar values, supporting a modified 'joy of winning' hypothesis but large overbids are more likely to occur when bidders believe their opponents to have much higher values, consistent with the 'spite' hypothesis.

Item Type:	Article
Faculty \ School:	Faculty of Social Sciences > School of Economics
UEA Research Groups:	Faculty of Social Sciences > Research Centres > Centre for Behavioural and Experimental Social Sciences Faculty of Social Sciences > Research Groups > Behavioural Economics
Related URLs:	http://www.scopus.com/inward/record.url?...
Depositing User:	Pure Connector
Date Deposited:	22 Nov 2013 13:58
Last Modified:	18 Apr 2023 23:42
URI:	https://ueaeprints.uea.ac.uk/id/eprint/44400
DOI:	10.1111/j.1468-0297.2008.02181.x

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