We report an experiment on a decision task by SAMUELSON and BAZERMAN (1985). Subjects submit a bid for an item with an … unknown value. A winner s curse phenomenon arises when subjects bid too high and make losses. Learning direction theory can … account for this. However, other influences on behaviour can also be identified. We introduce impulse balance theory to make …

behavioural models suggested by psychology (i.e., weighted probabilities applied to regret and rejoice theory), and by updating …

framework of game theory in order to better fit with the results of rapidly increasing laboratory experiments concerned with …