Abstract
Consumers often face prices that are the sum of two components, for example, an online purchase that includes a stated price and shipping costs. In such cases consumer behavior may be influenced by framing, i.e., how the components are bifurcated. Previous studies have demonstrated the effects of framing and anchoring in auctions. This study examines bidding patterns in a series of first-price sealed-bid experimental money auctions (where the commodity being auctioned is money itself). We hypothesize that bidders’ behavior is affected by the framing of the potential monetary payoff into “monetary prize” and “winner’s bonus” components. We find strong evidence of an anchoring effect that influences the strategic behavior of bidders.
Creative Commons License
This work is licensed under a Creative Commons Attribution 3.0 License.
Publication Date
2016
Document Type
Article
Department, Program, or Center
Department of Economics (CLA)
Recommended Citation
Vernarelli, Michael J. and Skillman, Justin S., "Framing Effects on Bidding Behavior in Experimental First-Price Sealed-Bid Money Auctions" (2016). Judgment and Decision Making, 11 (4), 391-400. Accessed from
https://repository.rit.edu/article/1820
Campus
RIT – Main Campus
