Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/93847 
Year of Publication: 
2010
Series/Report no.: 
SFB/TR 15 Discussion Paper No. 326
Publisher: 
Sonderforschungsbereich/Transregio 15 - Governance and the Efficiency of Economic Systems (GESY), München
Abstract: 
We use a unique hand collected data set of 6,258 auctions from the online football manager game Hattrick to study determinants and effects of reserve prices. We find that chosen reserve prices exhibit both very sophisticated and suboptimal behavior by the sellers. On the one hand, reserve prices are adjusted remarkably nuanced to the resulting sales price pattern. However, reserve prices are too clustered at zero and at multiples of e 50,000 as to be consistent with fully rational behavior. We recover the value distribution and simulate the loss in expected revenue from suboptimal reserve prices. Finally, we find evidence for the sunk cost fallacy as there is a substantial positive effect on the reserve price when the player has been acquired previously.
Subjects: 
Reserve Price
Auction Revenue
Inattention
Price Clusters
Sunk Cost Fallacy
JEL: 
D12
D44
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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