Auction mechanisms and the measurement of WTP and WTA

    Authors

    J. F. Shogren; S. Cho; C. Koo; J. List; C. Park; P. Polo;R. Wilhelmi

    Abbreviated Journal Title

    Resour. Energy Econ.

    Keywords

    auction; endowment effect; willingness to pay; willingness to accept; random nth-price auction; WILLINGNESS; PAY; ACCEPT; DISPARITY; BEHAVIOR; Economics; Energy & Fuels; Environmental Sciences; Environmental Studies

    Abstract

    We evaluate the impact of three auction mechanisms - the Becker-DeGroot-Marschak mechanism, the second-price auction, and the random nth-price auction - in the measurement of willingness to pay (WTP) and willingness to accept (WTA) measures of value, our results show that initial bidding in trial 1 in each auction does not contradict the endowment effect; but that, if it is the endowment effect that governs people's initial bidding behavior, it can be eliminated with repetitions of a second-price or random nth-price auction; and if the thesis is that the effect should persist across auctions and across trials is right, our results suggest that there is no fundamental endowment effect. (C) 2001 Elsevier Science B.V. All rights reserved.

    Journal Title

    Resource and Energy Economics

    Volume

    23

    Issue/Number

    2

    Publication Date

    1-1-2001

    Document Type

    Article

    Language

    English

    First Page

    97

    Last Page

    109

    WOS Identifier

    WOS:000167885300002

    ISSN

    0928-7655

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