Arbeitspapier

Cross-Game Learning and Cognitive Ability in Auctions

Overbidding in second-price auctions (SPAs) has been shown to be persistent and associated with cognitive ability. We study experimentally to what extent cross-game learning can reduce overbidding in SPAs, taking into account cognitive skills. Employing an order-balanced design, we use first-price auctions (FPAs) to expose participants to an auction format in which losses from high bids are more salient than in SPAs. Experience in FPAs causes substantial cross-game learning for cognitively less able participants but does not affect overbidding for the cognitively more able. Vice versa, experiencing SPAs before bidding in an FPA does not affect bidding behavior by the cognitively less able but, somewhat surprisingly, reduces bid shading by cognitively more able participants, resulting in lower profits in FPAs. Thus, cross-game learning has the potential to benefit bidders with lower cognitive ability whereas it has little or even adverse effects for higher ability bidders.

Sprache
Englisch

Erschienen in
Series: CESifo Working Paper ; No. 9396

Klassifikation
Wirtschaft
Noncooperative Games
Design of Experiments: Laboratory, Individual
Auctions
Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
Thema
cognitive ability
cross-game learning
experiment
auction
heuristics
first-price auctions
second-price auctions

Ereignis
Geistige Schöpfung
(wer)
Giebe, Thomas
Ivanova-Stenzel, Radosveta
Kocher, Martin G.
Schudy, Simeon
Ereignis
Veröffentlichung
(wer)
Center for Economic Studies and ifo Institute (CESifo)
(wo)
Munich
(wann)
2021

Handle
Letzte Aktualisierung
10.03.2025, 11:45 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Giebe, Thomas
  • Ivanova-Stenzel, Radosveta
  • Kocher, Martin G.
  • Schudy, Simeon
  • Center for Economic Studies and ifo Institute (CESifo)

Entstanden

  • 2021

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