The Impact of the Irrelevant: Temporary Buy-Options and Bidding Behavior in Auctions
AbstractWith a laboratory experiment, we study the impact of buy-options and the corresponding buy-price on revenues and bidding behavior in (online) proxy-auctions with independent private valuations. We show that temporary buy-options may reduce revenues for two reasons: At low buy-prices, the application of the buy-option avoids revenue-enhancing bidding; at high buy-prices, bidders are reluctant to bid above the option price (even though the option is no longer available once an auction has started). The latter suggests a particular type of anchoring, where bidders use the buy-price to update their expectations about the strengths of their opponents. View Full-Text
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Peeters, R.; Strobel, M.; Vermeulen, D.; Walzl, M. The Impact of the Irrelevant: Temporary Buy-Options and Bidding Behavior in Auctions. Games 2016, 7, 8.
Peeters R, Strobel M, Vermeulen D, Walzl M. The Impact of the Irrelevant: Temporary Buy-Options and Bidding Behavior in Auctions. Games. 2016; 7(1):8.Chicago/Turabian Style
Peeters, Ronald; Strobel, Martin; Vermeulen, Dries; Walzl, Markus. 2016. "The Impact of the Irrelevant: Temporary Buy-Options and Bidding Behavior in Auctions." Games 7, no. 1: 8.
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