Auctions with Anticipated Regret: Theory and Experiment

摘要

In this paper, we argue that overbidding in first price auctions is derived from the anticipation of loser regret. Experimental results suggest that bidders can, indeed, anticipate loser regret. On the other hand, in the experiment, the bidders did not anticipate winner regret and hence did not reflect these feelings in their bids.rnThese results are indeed capable of explaining some other feedback experiments in thernliterature. For example, Ockenfels and Selten (2005) found that giving feedback on losing bids leads to lower bids, compared to no feedback on losing bids in every period of their repeated first price auction experiment. In the first period, however, the bids under different treatments did not differ but were above the RNNE.