Optimal Reservation Prices in Auctions

1996 ◽  
Vol 106 (438) ◽  
pp. 1271 ◽  
Author(s):  
Dan Levin ◽  
James L. Smith
Keyword(s):  
Reservation Prices

Selling their Best for Little: The Riddle of Ecuador's Failed Attempt to Assist Communal Farmers

2004 ◽  
pp. 123-142
Author(s):  
María José Castillo ◽  
Richard Beilock
Keyword(s):  
Development Strategies ◽  
Irrigation Canals ◽  
Irrigation Systems ◽  
Access To Credit ◽  
Reservation Prices ◽  
Failed Attempt ◽  
Santa Elena

In the 1980s, Ecuador began an expensive project providing primary irrigation canals to the Santa Elena Peninsula. The intended beneficiaries were the region's communal farmers. Instead, virtually all irrigable lands have been sold to large farmers and land speculators, usually at exceedingly low prices. While political and economic abuses explain some of these sales, introduction into a communal setting of an innovation which improved returns to capital relative to labor made land divestitures almost inevitable. With effectively no access to credit, communal farmers had little ability to invest in secondary irrigation systems. Moreover, because users of irrigable lands did not fully control communal sales decisions, as these lands became attractive to others, dispossession risks rose. The net result was that reservation prices for holding these lands fell among communal farmers at the same time of increased demands for these assets by those outside the comunas. Implications for development strategies are also discussed.    

Noise Increases Anchoring Effects

2021 ◽  
pp. 095679762110242
Author(s):  
Chang-Yuan Lee ◽  
Carey K. Morewedge
Keyword(s):  
Theoretical Framework ◽  
Stimulus Feature ◽  
Stimulus Magnitude ◽  
Point Estimates ◽  
Plausible Values ◽  
Anchoring Effects ◽  
Anchoring Bias ◽  
Reservation Prices ◽  
Scalar Variability

We introduce a theoretical framework distinguishing between anchoring effects, anchoring bias, and judgmental noise: Anchoring effects require anchoring bias, but noise modulates their size. We tested this framework by manipulating stimulus magnitudes. As magnitudes increase, psychophysical noise due to scalar variability widens the perceived range of plausible values for the stimulus. This increased noise, in turn, increases the influence of anchoring bias on judgments. In 11 preregistered experiments ( N = 3,552 adults), anchoring effects increased with stimulus magnitude for point estimates of familiar and novel stimuli (e.g., reservation prices for hotels and donuts, counts in dot arrays). Comparisons of relevant and irrelevant anchors showed that noise itself did not produce anchoring effects. Noise amplified anchoring bias. Our findings identify a stimulus feature predicting the size and replicability of anchoring effects—stimulus magnitude. More broadly, we show how to use psychophysical noise to test relationships between bias and noise in judgment under uncertainty.

scholarly journals On Optimal Reservation Prices in Auctions

1987 ◽  
Vol 33 (6) ◽  
pp. 763-770 ◽  
Author(s):  
Richard Engelbrecht-Wiggans
Keyword(s):  
Reservation Prices

Nibbling, Sniping, and the Role of Uncertainty in Second-Price, Hard-Close Internet Auctions

2009 ◽  
pp. 1526-1539 ◽  
Author(s):  
Daniel Friesner ◽  
Carl S. Bozman ◽  
Matthew Q. McPherson
Keyword(s):  
Web Sites ◽  
Effective Means ◽  
Online Auction ◽  
Buyer Behavior ◽  
Internet Auctions ◽  
Bidding Strategies ◽  
Goods And Services ◽  
Reservation Prices ◽  
Auction Format

Internet auctions have gained widespread appeal as an efficient and effective means of buying and selling goods and services. This study examines buyer behavior on eBay, one of the most wellknown Internet auction Web sites. eBay’s auction format is similar to that of a second-price, hardclose auction, which gives a rational participant an incentive to submit a bid that is equal to his or her maximum willingness to pay. But while traditional second-price, hard-close auctions assume that participants have reliable information about their own and other bidders’ reservation prices, eBay participants usually do not. This raises the possibility that eBay participants may adapt their bidding strategies and not actually bid their reservation prices because of increased uncertainty. In this article, we empirically examine the bidding patterns of online auction participants and compare our findings to the behavior of bidders in more conventional auction settings.

Assessing the Effect of Information on the Reservation Price for Champagne: What are Consumers Actually Paying for?

2006 ◽  
Vol 1 (1) ◽  
pp. 75-88 ◽  
Author(s):  
Pierre Combris ◽  
Christine Lange ◽  
Sylvie Issanchou
Keyword(s):  
Willingness To Pay ◽  
Detailed Analysis ◽  
Sensory Information ◽  
Jel Classification ◽  
Reservation Price ◽  
Vickrey Auctions ◽  
Individual Behaviors ◽  
Reservation Prices ◽  
Large Heterogeneity

AbstractTwo series of Vickrey auctions have been performed to assess the effect of packaging information (bottle and label) on the reservation prices of ordinary consumers for five brut non-vintage Champagnes. As in other studies on wine tasting, packaging information is found to explain much more of the variation in willingness to pay than sensory information. Participants are unable, or unwilling, to put different values on the Champagnes after blind tasting, but significant differences in reservation prices appear when labels are disclosed. Detailed analysis of choices reveals a large heterogeneity in individual behaviors and valuations of the Champagnes included in this study. (JEL Classification: C91, D12)

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