Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/26419
Authors: 
Englmaier, Florian
Schmöller, Arno
Year of Publication: 
2008
Series/Report no.: 
CESifo working paper 2374
Abstract: 
We use a unique hand collected data set of 6 258 auctions from the online football manager game Hattrick to study micro-patterns of reserve price formation. We find that chosen reserve prices exhibit both, very sophisticated and irrational” behavior by the sellers. Reserve prices pick up the birthday effect” in sales prices, documented in Englmaier and Schmöller (2008) and are adjusted remarkably nuanced to the resulting sales price pattern. Moreover, reserve prices are too clustered (around multiples of €50 000) as to be consistent with fully rational behavior. Furthermore, we find evidence for entitlement effects and the sunk cost fallacy as there is a huge positive effect on the reserve price when the player has been acquired previously.
Subjects: 
Auctions
reserve price
bounded rationality
heuristics
entitlement effect
JEL: 
D12
D44
Document Type: 
Working Paper

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