Overbidding and Heterogeneous Behavior in Contest Experiments: A Comment on the Endowment Effect

Chowdhury, Subhasish M. and Moffatt, Peter G. (2017) Overbidding and Heterogeneous Behavior in Contest Experiments: A Comment on the Endowment Effect. Journal of Economic Surveys, 31 (2). pp. 572-576. ISSN 0950-0804

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Abstract

We revisit the meta-analysis of Sheremeta (2013) on overbidding in contest experiments and focus on the effect of endowment on overbidding. Whereas Sheremeta (2013) assumes, and finds evidence of, an increasing linear relationship between endowment and overbidding in his meta-analysis, Quantal Response Equilibrium (QRE) predicts an increasing concave relationship, and Baik et al. (2016) find an inverted-U shaped relationship in their analysis of a single experiment. We use the same data as in Sheremeta (2013), but employ a different econometric model which leads to support for both QRE and the inverted-U shaped relationship. Following Baik et al. (2016) we posit that the inverted-U relationship may be interpreted in terms of a wealth effect.

Item Type: Article
Uncontrolled Keywords: experiments,contests,overbidding,endowment,meta-analysis
Faculty \ School: Faculty of Social Sciences > School of Economics
Depositing User: Pure Connector
Date Deposited: 22 Mar 2016 09:30
Last Modified: 22 Apr 2020 01:05
URI: https://ueaeprints.uea.ac.uk/id/eprint/57787
DOI: 10.1111/joes.12152

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