Does Anticipated Regret Really Matter? Revisiting the Role of Feedback in Auction Bidding

CERGE-EI Working Paper Series No. 487

33 Pages Posted: 20 Jul 2013

See all articles by Peter Katuscak

Peter Katuscak

RWTH Aachen University - School of Business and Economics

Fabio Michelucci

Charles University in Prague - CERGE-EI, a joint workplace of Charles University and the Economics Institute of the Czech Academy of Sciences

Miroslav Zajicek

University of Economics, Prague

Date Written: July 1, 2013

Abstract

Does the type of post-auction feedback affect bidding behavior in first price auctions? Filiz-Ozbay and Ozbay (2007) find that such manipulation can increase bids in a one-shot auction. They explain this as an effect of anticipated regret combined with the assumption that feedback directly affects salience of regret relative to material payoff. We revisit this important market design issue using four different auction protocols and a large sample of subjects. We do not find any systematic effect of feedback on the average bid/value ratio. This evidence indicates either the lack of anticipated regret or its manipulability by feedback in one-shot auctions.

Keywords: auctions, bidding, feedback, regret

JEL Classification: C91, C92, D44

Suggested Citation

Katuscak, Peter and Michelucci, Fabio and Zajicek, Miroslav, Does Anticipated Regret Really Matter? Revisiting the Role of Feedback in Auction Bidding (July 1, 2013). CERGE-EI Working Paper Series No. 487, Available at SSRN: https://ssrn.com/abstract=2295892 or http://dx.doi.org/10.2139/ssrn.2295892

Peter Katuscak (Contact Author)

RWTH Aachen University - School of Business and Economics ( email )

Aachen
Germany

Fabio Michelucci

Charles University in Prague - CERGE-EI, a joint workplace of Charles University and the Economics Institute of the Czech Academy of Sciences ( email )

Politickych veznu 7
Prague, 111 21
Czech Republic

HOME PAGE: http://www.cerge-ei.cz

Miroslav Zajicek

University of Economics, Prague ( email )

nam. W.Churchilla 4
Prague 3, 130 67
Czech Republic

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