Expectation, Disappointment, and Exit: Evidence on Reference Point Formation from an Online Marketplace

• 成果类型: Article
• 署名作者: Backus, Matthew; Blake, Thomas; Masterov, Dimitriy; Tadelis, Steven
• 署名单位: Columbia University; Amazon.com; University of California System; University of California Berkeley
• 刊物名称: JOURNAL OF THE EUROPEAN ECONOMIC ASSOCIATION
• ISSN/ISSBN: 1542-4766
• DOI: 10.1093/jeea/jvab033
• 发表日期: 2022
• 页码: 116-149
• 关键词: reference-dependent preferences; decision-making; prospect-theory; experience; endowment; auctions; RISK; ECONOMICS; aversion; prices

摘要

We study disappointment and platform exit among new bidders in an online auction marketplace. In particular, we study a hybrid auction format with a Buy-It-Now option, which, when executed, will abruptly end the auction and cancel any standing bids. When this happens, if the formerly leading bidder is new to the platform, then they are 6 percentage points more likely to exit the marketplace for every additional day they spent in the lead. This is rationalized by disappointment-averse bidders with outside options and rational expectations about the likelihood of winning. Our explanation is validated by three ancillary predictions: when expectations are lowered by higher competing bids, there is no effect; sensitivity of exit is declining in prior experience; and, for bidders who do not exit, time in the lead during the first experience predicts a subsequent preference for fixed-price, rather than auction, listings.