Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2019-11-07
Revision-Date: 2020-04-27
Number: 19-074/I
Author-Name: Konstantinos Ioannidis
Author-Workplace-Name: University of Amsterdam
Author-Name: Theo Offerman
Author-Workplace-Name: University of Amsterdam
Author-Name: Randolph Sloof
Author-Workplace-Name: University of Amsterdam
Title: On the effect of anchoring on valuations when the anchor is transparently uninformative
Abstract: We test whether anchoring affects people's elicited valuations for a bottle of wine in individual decision making and in markets. We anchor subjects by asking them if they are willing to sell a bottle of wine for a transparently uninformative random price. We elicit subjects' Willingness-To-Accept for the bottle before and after the market. Subjects participate in a double auction market either in a small or a large trading group. The variance in subjects' Willingness-To-Accept shrinks within trading groups. Our evidence supports the idea that markets have the potential to diminish anchoring effects. However, the market is not needed: our anchoring manipulation failed in a large sample.
Classification-JEL: CD01, D91, C91
Keywords:  anchoring, replication, market, experiment
File-URL: https://papers.tinbergen.nl/19074.pdf
File-Format: application/pdf
File-Size: 1301474 bytes
Handle: RePEc:tin:wpaper:20190074