Loss aversion and learning to bid

Dittrich, Dennis Alexis Valin; Güth, Werner; Kocher, Martin G. und Pezanis-Christou, Paul (2012): Loss aversion and learning to bid. In: Economica, Bd. 79, Nr. 314: S. 226-257

Abstract

Bidding challenges learning theories. Even with the same bid, experiences vary stochastically: the same choice can result in either a gain or a loss. In such an environment, the question arises of how the nearly universally documented phenomenon of loss aversion affects the adaptive dynamics. We analyse the impact of loss aversion in a simple auction using the experienced-weighted attraction model of learning. Our experimental results suggest that individual learning dynamics are highly heterogeneous and affected by loss aversion to different degrees. Apart from that, the experiment shows that loss aversion is not specific to rare decision-making.

• Dokumententyp: Zeitschriftenartikel
• Fakultät: Volkswirtschaft ; Volkswirtschaft > Lehrstühle > Seminar für Experimentelle Wirtschaftsforschung
• Themengebiete: 300 Sozialwissenschaften > 330 Wirtschaft
• ISSN: 0167-2681
• Sprache: Englisch