Replication data for: Detection, Identification, and Estimation of Loss Aversion: Evidence from an Auction Experiment
Principal Investigator(s): View help for Principal Investigator(s) A. Banerji; Neha Gupta
Version: View help for Version V1
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Project Citation:
Banerji, A., and Gupta, Neha. Replication data for: Detection, Identification, and Estimation of Loss Aversion: Evidence from an Auction Experiment. Nashville, TN: American Economic Association [publisher], 2014. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2019-10-12. https://doi.org/10.3886/E114416V1
Project Description
Summary:
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We provide a novel experimental auction design, in which (i) an exogenous decrease in the probability of winning, conditional on the
bid, reduces the optimal bid of a loss averse agent whose reference point is expectations based; (ii) observed bid distributions uniquely
identify the participants' latent value distribution and loss-aversion parameter. Experimental evidence affirms the presence of such
reference points. We show that at the estimated magnitudes of loss aversion, (a) conventional Becker, DeGroot, and Marschak (1964)
experiments may lead to large biases in estimated willingness to pay (which our design can correct for); and (b) first-price auctions
may fetch moderately higher revenue, compared with second-price auctions.
Scope of Project
JEL Classification:
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C91 Design of Experiments: Laboratory, Individual
D44 Auctions
D82 Asymmetric and Private Information; Mechanism Design
C91 Design of Experiments: Laboratory, Individual
D44 Auctions
D82 Asymmetric and Private Information; Mechanism Design
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