Going, Going, Gone: Competitive Decision-Making in Dutch Auctions

Autor/inn/en	Bennett, Murray; Mullard, Rachel; Adam, Marc T. P.; Steyvers, Mark; Brown, Scott; Eidels, Ami
Titel	Going, Going, Gone: Competitive Decision-Making in Dutch Auctions
Quelle	In: Cognitive Research: Principles and Implications, 5 (2020), Artikel 62 (22 Seiten) PDF als Volltext Verfügbarkeit
Zusatzinformation	ORCID (Bennett, Murray)
Sprache	englisch
Dokumenttyp	gedruckt; online; Zeitschriftenaufsatz
ISSN	2365-7464
DOI	10.1186/s41235-020-00259-w
Schlagwörter	Competition; Decision Making; Foreign Countries; Bids; Purchasing; Behavior; Netherlands + Suchen Sie Ihr Suchwort? Wettkampf; Decision-making; Entscheidungsfindung; Ausland; Ausschreibung; Beschaffungswesen; Kauf; Niederlande
Abstract	In a Dutch auction, an item is offered for sale at a set maximum price. The price is then gradually lowered over a fixed interval of time until a bid is made, securing the item for the bidder at the current price. Bidders must trade-off between certainty and price: bid early to secure the item and you pay a premium; bid later at a lower price but risk losing to another bidder. These properties of Dutch auctions provide new opportunities to study competitive decision-making in a group setting. We developed a novel computerised Dutch auction platform and conducted a set of experiments manipulating volatility (fixed vs varied number of items for sale) and price reduction interval rate (step-rate). Triplets of participants (N = 66) competed with hypothetical funds against each other. We report null effects of step-rate and volatility on bidding behaviour. We developed a novel adaptation of prospect theory to account for group bidding behaviour by balancing certainty and subjective expected utility. We show the model is sensitive to variation in auction starting price and can predict the associated changes in group bid prices that were observed in our data. (As Provided).
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Erfasst von	ERIC (Education Resources Information Center), Washington, DC
Update	2024/1/01