Emotions and Economic Shocks in a First-price Auction: an Experimental Study
نویسندگان
چکیده
We investigate experimentally whether emotions affect bidding behavior in a first price auction. To induce emotions, we confront subjects after a first auction series with a positive or negative random economic shock. We then explore the relation between emotions and bidding behavior in a second auction series. Our main results are: (i) the economic shock has a substantial impact on the experienced emotions of bidders; (ii) the emotional state systematically influences bidding behavior. In particular, negative emotions induce more competitive bidding. Our findings show that for a good understanding of bidder behavior the emotions have to be taken into account. JEL Classification Number: A12, C72, C91, C92
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