Abstract
We use a unique hand collected data set of 6 258 auctions from the online football manager game Hattrick to study micro-patterns of reserve price formation. We find that chosen reserve prices exhibit both, very sophisticated and “irrational” behavior by the sellers. Reserve prices pick up the “birthday effect” in sales prices, documented in Englmaier and Schmöller (2008) and are adjusted remarkably nuanced to the resulting sales price pattern. Moreover, reserve prices are too clustered (around multiples of €50 000) as to be consistent with fully rational behavior. Furthermore, we find evidence for entitlement effects and the sunk cost fallacy as there is a huge positive effect on the reserve price when the player has been acquired previously.
| Item Type: | Paper |
|---|---|
| Keywords: | auctions; reserve price; bounded rationality; heuristics; entitlement effect |
| Faculties: | Economics Economics > Chairs > Seminar for Organizational Economics |
| Subjects: | 300 Social sciences > 330 Economics |
| JEL Classification: | D12, D44 |
| Place of Publication: | München |
| Language: | English |
| Item ID: | 22048 |
| Date Deposited: | 03. Dec 2014, 13:01 |
| Last Modified: | 03. Mar 2017, 10:52 |
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