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
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: Suggested Citation