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Po 06.05.2013

Dr. Peter Katuščák: “Does Anticipated Regret Really Matter? Revisiting the Role of Feedback in Auction Bidding”

Dr. Peter Katuščák

CERGE-EI

Authors: Peter Katuščák, Fabio Michelucci, and Miroslav Zajíček

Abstract: Does the type of post-auction feedback affect bidding behavior in the first price auction? Filiz-Ozbay and Ozbay (2007) find that such manipulation can increase bids in a one-shot auction. They explain their finding by anticipated regret combined with the assumption that feedback directly affects salience of regret relative to material payoff. We revisit this important market design issue using four different auction protocols and a large sample of subjects. We do not find any systematic effect of feedback on the average bid/value ratio. This evidence contradicts a presence of anticipated regret or its manipulability by feedback in one-shot auctions.

Keywords: auctions, bidding, feedback, regret

JEL Classification: C91, C92, D03, D44

Full Text:  “Does Anticipated Regret Really Matter? Revisiting the Role of Feedback in Auction Bidding”