Reserve Prices as Reference Points : Evidence from Auctions for Football Players at Hattrick.org

  • We study the impact of sellers’ reserve prices on transfer prices in online auctions of virtual football players at Hattrick.org. We introduce an empirical model that distinguishes between two separate effects from public reserve prices: (1) a mechanical effect, which is driven by the design of the English auction and (2) a psychological reference-dependence effect through reserve prices serving as reference points. The psychological effect has recently been introduced in behavioral models of situations where agents are uncertain about their own willingness-to-pay, while the mechanical effect is well captured by standard auction theory. Controlling for censoring when players are not sold, both effects are observed. Once we account for the potential endogeneity of reserve prices, however, we do not find evidence for reference dependence in Hattrick auctions.

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Metadaten
Document Type:Article
Language:English
Author(s):Christian Traxler, Stefan Trautmann
Parent Title (English):Journal of Economic Psychology
ISSN:0167-4870
Publication year:2010
Publishing Institution:Hertie School
First Page:230
Last Page:240
DOI:https://doi.org/10.1016/j.joep.2009.08.004
Release Date:2017/08/02
Tag:Auctions; Online games; Reference dependence; Reserve prices
Volume:31
Issue:2
Notes:
This is a post-peer-review, pre-copyedit version of an article published in Journal of Economic Psychology. The final authenticated version is available online at: DOI 10.1016/j.joep.2009.08.004
Licence of document (German):Metadaten (öffentlich), post-print
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