The Reference Price Is Not The Limit: Analysis Of Consumer Valuations In Second-price Vickrey Auction

We assess the role of perceived reference price (PRP) in consumers’ valuations for four different bread types in secondprice Vickrey auctions taking into account the presence of market substitutes. A possible censoring effect of perceived reference price is modeled using a random effects Tobit model with lower and upper thresholds. The estimates are compared to a random effects Tobit model censored at zero only. In contrast to the existing literature, our results indicate that including perceived reference price in upper threshold does not improve the model fit and thus question the role of PRP as an upper limit for auction bids.


Issue Date:
Aug 29 2017
Publication Type:
Conference Paper/ Presentation
Language:
English
Total Pages:
11




 Record created 2017-08-01, last modified 2017-08-29

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