Getting Carried Away in Auctions as Imperfect Value Discovery

Eric Rasmusen ()

Industrial Organization from EconWPA

Abstract: Bidders have to decide whether and when to incur the cost of estimating their own values in auctions. This can explain why people seem to get carried away, bidding higher than they had planned before the auction and then finding they had paid more than the object was worth to them. Even when such behavior is rational, ex ante, it may be perceived as irrational if one ignores other situations in which people revise their bid ceilings upwards and are happy when that enables them to win the auction.

Keywords: private value; auctions; behavioral; e-bay; reservation price (search for similar items in EconPapers)
JEL-codes: L (search for similar items in EconPapers)
Date: 2004-09-04
Note: Type of Document - pdf; pages: 30
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http://129.3.20.41/eps/io/papers/0409/0409001.pdf (application/pdf)

Related works:
Working Paper: Getting Carried Away in Auctions as Imperfect Value Discovery (2007)
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpio:0409001

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