A pseudo-endowment effect in internet auctions

Jens-Martin Bramsen ()

MPRA Paper from University Library of Munich, Germany

Abstract: Although bidders in an internet auction do not obtain the actual ownership of the item during the auction, they still act according to an endowment effect. In a unique data set of 17,000 Danish furniture auctions I find that having the leading bid, both in terms of time and dollars, will affect the bidders probability to rebid if outbid. Thus, expectations to own, i.e. “pseudo-endowment ”, seem to affect bidders’ willingness to pay in a relative fast and straightforward manor. Gener- ally, these data therefore support that the reference point, from which we measure losses and gains, is closely related to expectations.

Keywords: Internet auctions; Reference-Dependent Preferences; Endowment Effect; bidding behavior; eBay; WTP; Reference Point (search for similar items in EconPapers)
JEL-codes: D01 D12 D4 D44 (search for similar items in EconPapers)
Date: 2008-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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