English versus Vickrey auctions with loss averse bidders:
Evidence suggests that people evaluate outcomes relative to expectations. I analyze this expectation-based loss aversion (Köszegi and Rabin (2006, 2009)) in the context of dynamic and static auctions, where the reference point is given by the (endogenous) equilibrium outcome. If agents update their...
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| Main Author: | |
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| Format: | Electronic eBook |
| Language: | English |
| Published: |
Berlin
Freie Universität Berlin
December 19, 2018
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| Series: | Discussion paper / Freie Universität Berlin, School of Business & Economics Economics
2019, 1 |
| Subjects: | |
| Online Access: | Volltext |
| Summary: | Evidence suggests that people evaluate outcomes relative to expectations. I analyze this expectation-based loss aversion (Köszegi and Rabin (2006, 2009)) in the context of dynamic and static auctions, where the reference point is given by the (endogenous) equilibrium outcome. If agents update their reference point during the auction, the arrival of information crucially affects equilibrium behavior. Consequently, I show that - even with independent private values - the Vickrey auction yields strictly higher revenue than the English auction, violating the well known revenue equivalence. Thus, dynamic loss aversion offers a novel explanation for empirically observed differences between these auction formats |
| Physical Description: | 1 Online-Ressource (59 Seiten) Diagramme |
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| id | DE-604.BV045522620 |
| illustrated | Not Illustrated |
| indexdate | 2024-07-10T08:20:27Z |
| institution | BVB |
| language | English |
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| physical | 1 Online-Ressource (59 Seiten) Diagramme |
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| publishDate | 2018 |
| publishDateSearch | 2018 |
| publishDateSort | 2018 |
| publisher | Freie Universität Berlin |
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| series2 | Discussion paper / Freie Universität Berlin, School of Business & Economics Economics |
| spelling | Wangenheim, Jonas von Verfasser (DE-588)1165244942 aut English versus Vickrey auctions with loss averse bidders Jonas von Wangenheim Berlin Freie Universität Berlin December 19, 2018 1 Online-Ressource (59 Seiten) Diagramme txt rdacontent c rdamedia cr rdacarrier Discussion paper / Freie Universität Berlin, School of Business & Economics 2019, 1 Economics Evidence suggests that people evaluate outcomes relative to expectations. I analyze this expectation-based loss aversion (Köszegi and Rabin (2006, 2009)) in the context of dynamic and static auctions, where the reference point is given by the (endogenous) equilibrium outcome. If agents update their reference point during the auction, the arrival of information crucially affects equilibrium behavior. Consequently, I show that - even with independent private values - the Vickrey auction yields strictly higher revenue than the English auction, violating the well known revenue equivalence. Thus, dynamic loss aversion offers a novel explanation for empirically observed differences between these auction formats Vickrey auction English auction expectation-based loss aversion revenue equivalence dynamic loss aversion personal equilibrium Asymmetrische Information (DE-588)4120934-5 gnd rswk-swf Auktionstheorie (DE-588)4732699-2 gnd rswk-swf Informationsökonomie (DE-588)4161671-6 gnd rswk-swf Auktionstheorie (DE-588)4732699-2 s Asymmetrische Information (DE-588)4120934-5 s Informationsökonomie (DE-588)4161671-6 s DE-604 Freie Universität Berlin, School of Business & Economics Discussion paper 2019, 1 : Economics (DE-604)BV026641400 2019,1 https://refubium.fu-berlin.de/handle/fub188/23763 Resolving-System kostenfrei Volltext |
| spellingShingle | Wangenheim, Jonas von English versus Vickrey auctions with loss averse bidders Vickrey auction English auction expectation-based loss aversion revenue equivalence dynamic loss aversion personal equilibrium Asymmetrische Information (DE-588)4120934-5 gnd Auktionstheorie (DE-588)4732699-2 gnd Informationsökonomie (DE-588)4161671-6 gnd |
| subject_GND | (DE-588)4120934-5 (DE-588)4732699-2 (DE-588)4161671-6 |
| title | English versus Vickrey auctions with loss averse bidders |
| title_auth | English versus Vickrey auctions with loss averse bidders |
| title_exact_search | English versus Vickrey auctions with loss averse bidders |
| title_full | English versus Vickrey auctions with loss averse bidders Jonas von Wangenheim |
| title_fullStr | English versus Vickrey auctions with loss averse bidders Jonas von Wangenheim |
| title_full_unstemmed | English versus Vickrey auctions with loss averse bidders Jonas von Wangenheim |
| title_short | English versus Vickrey auctions with loss averse bidders |
| title_sort | english versus vickrey auctions with loss averse bidders |
| topic | Vickrey auction English auction expectation-based loss aversion revenue equivalence dynamic loss aversion personal equilibrium Asymmetrische Information (DE-588)4120934-5 gnd Auktionstheorie (DE-588)4732699-2 gnd Informationsökonomie (DE-588)4161671-6 gnd |
| topic_facet | Vickrey auction English auction expectation-based loss aversion revenue equivalence dynamic loss aversion personal equilibrium Asymmetrische Information Auktionstheorie Informationsökonomie |
| url | https://refubium.fu-berlin.de/handle/fub188/23763 |
| volume_link | (DE-604)BV026641400 |
| work_keys_str_mv | AT wangenheimjonasvon englishversusvickreyauctionswithlossaversebidders |