Emotions and Economic Shocks in a First-Price Auction

Arbeitspapier

We investigate experimentally whether emotions affect bidding behavior in a firstprice auction. To induce emotions, we confront subjects after a first auction series with apositive or negative random economic shock. We then explore the relation between emotions andbidding behavior in a second auction series. Our main results are: (i) the economic shock has asubstantial impact on the experienced emotions of bidders; (ii) the emotional statesystematically influences bidding behavior. In particular, negative emotions induce morecompetitive bidding. Our findings show that for a good understanding of bidder behavior theemotions have to be taken into account.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Tinbergen Institute Discussion Paper ; No. 03-056/1

Classification and Topics

• Classification: Wirtschaft ; Relation of Economics to Other Disciplines ; Noncooperative Games ; Design of Experiments: Laboratory, Individual ; Design of Experiments: Laboratory, Group Behavior
• Subject: auction ; economic shock ; emotion ; experiment. ; Auktion ; Schock ; Test ; Theorie ; Emotion

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bosman, Ronald ; Riedl, Arno
• Event: Veröffentlichung
• (who): Tinbergen Institute
• (where): Amsterdam and Rotterdam
• (when): 2003

Further information

• Handle: http://hdl.handle.net/10419/85894
• Last update: 10.03.2025, 11:41 AM CET