Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/85894 
Year of Publication: 
2003
Series/Report no.: 
Tinbergen Institute Discussion Paper No. 03-056/1
Publisher: 
Tinbergen Institute, Amsterdam and Rotterdam
Abstract: 
We investigate experimentally whether emotions affect bidding behavior in a firstprice auction. To induce emotions, we confront subjects after a first auction series with apositive or negative random economic shock. We then explore the relation between emotions andbidding behavior in a second auction series. Our main results are: (i) the economic shock has asubstantial impact on the experienced emotions of bidders; (ii) the emotional statesystematically influences bidding behavior. In particular, negative emotions induce morecompetitive bidding. Our findings show that for a good understanding of bidder behavior theemotions have to be taken into account.
Subjects: 
auction
economic shock
emotion
experiment.
JEL: 
A12
C72
C91
C92
Document Type: 
Working Paper

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