Demand Curve Effects in Experimental Auctions: The Effect of Quantity Already Owned Report as inadecuate




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Most studies utilizing experimental auction mechanisms to elicit consumers’willingness to pay are designed to avoid potential substitution or demand-curveeffects that may influence bid prices. However, previous research and auctiondesigns have not considered the potential impact on bid prices of commodityinventories held by auction participants that were obtained through transactionsoutside of the auction. This omission may present a problem for interpretingand analyzing auction data. Using bids from a random nth-price auction of freshvegetables conducted in a laboratory style setting, we test whetherparticipants’ outside inventories affect bidding behavior. We find that biddersdo in fact consider their inventories, resulting in lower bid prices byindividuals with quantity already owned.

Subject(s): Consumer/Household Economics

Demand and Price Analysis

Issue Date: 2009

Publication Type: Conference Paper/ Presentation

PURL Identifier: http://purl.umn.edu/49551

Total Pages: 15

Series Statement: Selected Paper

613105

Record appears in: Agricultural and Applied Economics Association (AAEA) > 2009 Annual Meeting, July 26-28, 2009, Milwaukee, Wisconsin





Author: Colson, Gregory ; Huffman, Wallace E. ; Rousu, Matthew C.

Source: http://ageconsearch.umn.edu/record/49551?ln=en



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