Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2003-06-19
Number: 03-056/1
Author-Name: Ronald Bosman
Author-Email: r.a.j.bosman@dnb.nl
Author-Workplace-Name: De Nederlandsche Bank
Author-Name: Arno Riedl
Author-Email: a.m.riedl@uva.nl
Author-Workplace-Name: Faculty of Economics and Econometrics, University of Amsterdam
Title: Emotions and Economic Shocks in a First-Price Auction
Abstract: We investigate experimentally whether emotions affect bidding behavior in a firstprice auction. To induce emotions, we confront subjects after a first auction series with apositive or negative random economic shock. We then explore the relation between emotions andbidding behavior in a second auction series. Our main results are: (i) the economic shock has asubstantial impact on the experienced emotions of bidders; (ii) the emotional statesystematically influences bidding behavior. In particular, negative emotions induce morecompetitive bidding. Our findings show that for a good understanding of bidder behavior theemotions have to be taken into account.
Classification-JEL: A12; C72; C91; C92.
Keywords: auction; economic shock; emotion; experiment.
File-Url: https://papers.tinbergen.nl/03056.pdf
File-Format: application/pdf
File-Size: 451214 bytes
Handle: RePEc:tin:wpaper:20030056