Please use this identifier to cite or link to this item:
https://hdl.handle.net/2440/76780
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Type: | Journal article |
Title: | Loss aversion and learning to bid |
Author: | Dittrich, D. Guth, W. Kocher, M. Pezanis-Christou, P. |
Citation: | Economica, 2012; 79(314):226-257 |
Publisher: | Blackwell Publ Ltd |
Issue Date: | 2012 |
ISSN: | 0013-0427 1468-0335 |
Statement of Responsibility: | Dennis A.V. Dittrich, Werner Güth, Martin G. Kocher and Paul Pezanis-Christou |
Abstract: | Bidding 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. |
Rights: | © 2011 The London School of Economics and Political Science |
DOI: | 10.1111/j.1468-0335.2011.00892.x |
Published version: | http://dx.doi.org/10.1111/j.1468-0335.2011.00892.x |
Appears in Collections: | Aurora harvest Economics publications |
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RA_hdl_76780.pdf Restricted Access | Restricted Access | 724.94 kB | Adobe PDF | View/Open |
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