Regret and feedback information in first-price sealed-bid auctions

• 成果类型: Article
• 署名作者: Engelbrecht-Wiggans, Richard; Katok, Elena
• 署名单位: University of Illinois System; University of Illinois Urbana-Champaign; Pennsylvania Commonwealth System of Higher Education (PCSHE); Pennsylvania State University; Pennsylvania State University - University Park
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.1070.0806
• 发表日期: 2008
• 页码: 808-819
• 关键词: Auctions; competitive bidding; regret; learning; Experimental economics

摘要

We investigate the effect of regret-related feedback information on bidding behavior in sealed-bid first-price auctions. Two types of regret are possible in this auction format. A winner of the auction may regret paying too much relative to the second highest bid, and a loser may regret missing an opportunity to win at a favorable price. In theory, under very general conditions, being sensitive to winning and paying too much should result in lower average bids, and being sensitive to missing opportunities to win at a favorable price should result in higher bids. For example, the U.S. Government's policy of revealing losing bids may cause regret-sensitive bidders to anticipate regret and bid conservatively, decreasing the government's revenue. We test these predictions in the laboratory and find strong support for both.