TY - JOUR
T1 - The initial endowment effect in experimental auctions revisited
T2 - Further evidence
AU - Nalley, Lanier
AU - Hudson, Darren
AU - Parkhurst, Gregory
N1 - Funding Information:
The authors thank Keith Coble and Jayson Lusk for comments on this experiment and paper. This research was supported by the United States Department of Agriculture, Agricultural Research Service through a cooperative agreement.
PY - 2005/1/15
Y1 - 2005/1/15
N2 - This analysis employs a uniform 4th price sealed-bid auction to test the impact of endowment heterogeneity on participant bids. A mechanism to legitimize the wealth of participants consistent with prior research on endowments is employed. Second, unlike some previous literature, a mechanism to endogenously induce endowment heterogeneity is employed. Results from a Tobit analysis of participant bids indicate that endowment heterogeneity has no significant impact on bidding behaviour. Therefore, it is concluded that when wealth is legitimized within an experiment, bidding behaviour is more likely rational leading to more robust experimental results.
AB - This analysis employs a uniform 4th price sealed-bid auction to test the impact of endowment heterogeneity on participant bids. A mechanism to legitimize the wealth of participants consistent with prior research on endowments is employed. Second, unlike some previous literature, a mechanism to endogenously induce endowment heterogeneity is employed. Results from a Tobit analysis of participant bids indicate that endowment heterogeneity has no significant impact on bidding behaviour. Therefore, it is concluded that when wealth is legitimized within an experiment, bidding behaviour is more likely rational leading to more robust experimental results.
UR - http://www.scopus.com/inward/record.url?scp=14644436445&partnerID=8YFLogxK
U2 - 10.1080/1350485042000307080
DO - 10.1080/1350485042000307080
M3 - Article
AN - SCOPUS:14644436445
VL - 12
SP - 59
EP - 63
JO - Applied Economics Letters
JF - Applied Economics Letters
SN - 1350-4851
IS - 1
ER -