American Economics Association
AEA Logo


American Economic Review


Search:





AEA Member Login:


Quick Tools:

View Full Text of This Article

Download Data Set

Link to Additional Materials

Email Link to this Article Export Citation

Sign up for Email Alerts

Follow us on Twitter

Explore:

AER - Previous Issues
AER - September 2007

JEL Indexes (Members Only)

American Economic Review

Vol. 97, No. 4, September 2007


Auctions with Anticipated Regret: Theory and Experiment
Emel Filiz-Ozbay and Erkut Y. Ozbay

Article Citation
Filiz-Ozbay, Emel, and Erkut Y. Ozbay. 2007. "Auctions with Anticipated Regret: Theory and Experiment." American Economic Review, 97(4): 1407–1418.
DOI:10.1257/aer.97.4.1407

Abstract
This paper demonstrates theoretically and experimentally that in first-price auctions overbidding with respect to the risk neutral Nash equilibrium might be driven from anticipated loser regret (felt when bidders lose at an affordable price). Different information structures are created to elicit regret: bidders know they will learn the winning bid if they lose (loser regret condition); or the second-highest bid if they win (winner regret condition); or they will receive no feedback regarding the other bids. Bidders in loser regret condition anticipated regret and significantly overbid. However, bidders in the winner regret condition did not anticipate regret. (JEL D44)

Article Full-Text Access
Full-Text Article

Additional Materials
Download Data Set | Link to Additional Materials

Authors
Filiz-Ozbay, Emel
Ozbay, Erkut Y.