The Reference Price Is Not The Limit: Analysis Of Consumer Valuations In Second-price Vickrey Auction

Irina Dolgopolova, Ramona Teuber and Jutta Roosen

No 260882, 2017 International Congress, August 28-September 1, 2017, Parma, Italy from European Association of Agricultural Economists

Abstract: We assess the role of perceived reference price (PRP) in consumers’ valuations for four different bread types in secondprice Vickrey auctions taking into account the presence of market substitutes. A possible censoring effect of perceived reference price is modeled using a random effects Tobit model with lower and upper thresholds. The estimates are compared to a random effects Tobit model censored at zero only. In contrast to the existing literature, our results indicate that including perceived reference price in upper threshold does not improve the model fit and thus question the role of PRP as an upper limit for auction bids.

Keywords: Consumer/Household Economics; Demand and Price Analysis (search for similar items in EconPapers)
Pages: 11
Date: 2017-08-29
New Economics Papers: this item is included in nep-des
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Persistent link: https://EconPapers.repec.org/RePEc:ags:eaae17:260882

DOI: 10.22004/ag.econ.260882

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