Negative Values in Vickrey Auctions
Some people assign negative values for new products sold on laboratory auction blocks (i.e., irradiated meat). We explore bidding behavior in two Vickrey auctions when people have positive- and negative-induced values for the good. Aggregate bidding in the second-price auction is precise but biased-highest-value positive bidders tend to overstate benefits, whereas lowest-negative bidders understate losses. In contrast, bidding behavior in the random "n"th-price auction is demand revealing irrespective of induced value, but it is imprecise. Examining on- and off-margin bidding behavior, we cannot conclude that any segments of demand are significantly different than the demand revealing regression line. Copyright 2003 American Agricultural Economics Association.
Year of publication: |
2004
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Authors: | Parkhurst, Gregory M. ; Shogren, Jason F. ; Dickinson, David L. |
Published in: |
American Journal of Agricultural Economics. - American Agricultural Economics Association. - Vol. 86.2004, 1, p. 222-235
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Publisher: |
American Agricultural Economics Association |
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