Decision-making in Home-grown Value Auctions under Induced Mood States

Andreas C. Drichoutis, Rodolfo M. Nayga, Jr, Stathis Klonaris

Research output: Contribution to journalArticle

Abstract

This article contributes to the research agenda of accommodating psychological insights in conventional lab experiments. We specifically test whether inducing subjects into different mood states has a significant effect on subjects’ rationality (in the form of preference reversals) and on bidding behaviour in home-grown value auctions. We find that mood states can significantly affect the rate of preference reversals and bidding behaviour in experimental auction valuation. Specifically we find that subjects under a positive mood state exhibit more rational behaviour (i.e., less preference reversals) and provide lower bid values than others.

Original languageEnglish
Pages (from-to)141-163
Number of pages23
JournalStudies in Microeconomics
Volume2
Issue number2
DOIs
Publication statusPublished - 2014 Dec 1

Keywords

  • affect
  • Mood
  • preference reversals
  • rationality
  • Vickrey auction

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)

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