Loss aversion and learning to bid

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dc.contributor.authorDittrich, D.
dc.contributor.authorGuth, W.
dc.contributor.authorKocher, M.
dc.contributor.authorPezanis-Christou, P.
dc.date.issued2012
dc.description.abstractBidding challenges learning theories. Even with the same bid, experiences vary stochastically: the same choice can result in either a gain or a loss. In such an environment, the question arises of how the nearly universally documented phenomenon of loss aversion affects the adaptive dynamics. We analyse the impact of loss aversion in a simple auction using the experienced-weighted attraction model of learning. Our experimental results suggest that individual learning dynamics are highly heterogeneous and affected by loss aversion to different degrees. Apart from that, the experiment shows that loss aversion is not specific to rare decision-making.
dc.description.statementofresponsibilityDennis A.V. Dittrich, Werner Güth, Martin G. Kocher and Paul Pezanis-Christou
dc.identifier.citationEconomica, 2012; 79(314):226-257
dc.identifier.doi10.1111/j.1468-0335.2011.00892.x
dc.identifier.issn0013-0427
dc.identifier.issn1468-0335
dc.identifier.orcidPezanis-Christou, P. [0000-0001-6521-4139]
dc.identifier.urihttp://hdl.handle.net/2440/76780
dc.language.isoen
dc.publisherBlackwell Publ Ltd
dc.rights© 2011 The London School of Economics and Political Science
dc.source.urihttps://doi.org/10.1111/j.1468-0335.2011.00892.x
dc.titleLoss aversion and learning to bid
dc.typeJournal article
pubs.publication-statusPublished

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