Examining Projection Bias in Experimental Auctions: The Role of Hunger and Immediate Gratification

Briz Teresa, Andreas Drichoutis, Rodolfo Nayga and Lisa House

MPRA Paper from University Library of Munich, Germany

Abstract: The relevance of projection bias in decision making processes has been widely studied, but not specifically in experimental auctions. We study the role of projection bias in experimental auctions by examining the bidding behavior of hungry and non-hungry subjects on food products delivered either immediately after the auction or in one week’s time. Results indicate that the difference in bids between a hot state (hunger) and a cold state (satiation) almost doubles when subjects have to predict their future tastes versus when they bid for a product intended for immediate consumption. More specifically, when subjects have to predict their future willingness to pay from their current tastes, they tend to over-predict their hunger and under-predict satiation.

Keywords: Experimental auction; willingness to pay; projection bias; hunger (search for similar items in EconPapers)
JEL-codes: C90 D03 D44 (search for similar items in EconPapers)
Date: 2011-04-12, Revised 0013-03-05
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: Examining projection bias in experimental auctions: the role of hunger and immediate gratification (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:44764

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