Arbeitspapier
An Experimental Test of Precautionary Bidding
Auctions often involve goods exhibiting a common knowledge ex-post risk that is independent of buyers’ private values or their signals regarding common value components. Esö and White (2004) showed theoretically that ex-post risk leads to precautionary bidding for DARA bidders: Agents reduce their bids by more than their appropriate risk premium. Testing precautionary bidding with data from the field seems almost impossible. We conduct experimental first-price auctions that allow us to directly identify the precautionary premium and find clear evidence for precautionary bidding. Bidders are significantly better off when a risky object rather than an equally valued sure object is auctioned. Our results are robust if we control for potentially confounding decision biases.
- Sprache
-
Englisch
- Erschienen in
-
Series: Munich Discussion Paper ; No. 2010-30
- Klassifikation
-
Wirtschaft
Design of Experiments: Laboratory, Individual
Auctions
Criteria for Decision-Making under Risk and Uncertainty
- Thema
-
precautionary bidding
prudence
auction
experiment
Auktionstheorie
Entscheidung bei Risiko
Risikoprämie
Test
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Kocher, Martin G.
Pahlke, Julius
Trautmann, Stefan T.
- Ereignis
-
Veröffentlichung
- (wer)
-
Ludwig-Maximilians-Universität München, Volkswirtschaftliche Fakultät
- (wo)
-
München
- (wann)
-
2010
- DOI
-
doi:10.5282/ubm/epub.11743
- Handle
- URN
-
urn:nbn:de:bvb:19-epub-11743-5
- Letzte Aktualisierung
-
10.03.2025, 11:44 MEZ
Datenpartner
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Objekttyp
- Arbeitspapier
Beteiligte
- Kocher, Martin G.
- Pahlke, Julius
- Trautmann, Stefan T.
- Ludwig-Maximilians-Universität München, Volkswirtschaftliche Fakultät
Entstanden
- 2010
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