Spite and reciprocity in auctions
Summary: The paper presents a complete information model of bidding in second price sealed-bid and ascending-bid (English) auctions, in which potential buyers know the unit valuation of other bidders and may spitefully prefer that their rivals earn a lower surplus. Bidders with spiteful preferences should overbid in equilibrium when they know their rival has a higher value than their own, and bidders with a higher value underbid to reciprocate the spiteful overbidding of the lower value bidders. The model also predicts different bidding behavior in second price as compared to ascending-bid auctions. The paper also presents experimental evidence broadly consistent with the model. In the complete information environment, lower value bidders overbid more than higher value bidders, and they overbid more frequently in the second price auction than in the ascending price auction. Overall, the lower value bidder submits bids that exceed value about half the time. These patterns are not found in the incomplete information environment, consistent with the model.
- The spite motive in third price auctions
- Auction revenue in the general spiteful-utility model
- Altruism, spite and competition in bargaining games
- Spiteful bidding and gaming in combinatorial clock auctions
- Spite vs. risk: explaining overbidding in the second-price all-pay auction. A theoretical and experimental investigation
- Comparative statics of altruism and spite
- Regret in auctions: theory and evidence
- Tit for tat: foundations of preferences for reciprocity in strategic settings
- Bargaining and inequity aversion: on the efficiency of the double auction
- A Theory of Auctions and Competitive Bidding
- A theory of reciprocity
- A theory of sequential reciprocity
- An Experimental Study of Information Revelation Policies in Sequential Auctions
- Asymmetric information about rivals' types in standard auctions: an experiment
- Consequentialist foundations for expected utility
- Psychological games and sequential rationality
- Secure implementation experiments: Do strategy-proof mechanisms really work?
- Tit for tat: foundations of preferences for reciprocity in strategic settings
- Understanding Social Preferences with Simple Tests
- Acts of helping and harming
- The spite motive in third price auctions
- Second-price auction tournament
- Why do you hate me?: On the survival of spite.
- Evolutionary stability in the generalized second-price auction
- Bidding in private-value auctions with uncertain values
- Asymmetric information about rivals' types in standard auctions: an experiment
- Spite vs. risk: explaining overbidding in the second-price all-pay auction. A theoretical and experimental investigation
- Auction revenue in the general spiteful-utility model
- An externality-robust auction: theory and experimental evidence
- Goodwill can hurt: a theoretical and experimental investigation of return policies in auctions
- Bayesian auctions with friends and foes
- An experimental study of sponsored-search auctions
- The `spite' dilemma: spite or no spite, is there a dilemma?
- A tractable theory of value-dependent spite in first- and second-price auctions
This page was built for publication: Spite and reciprocity in auctions
Report a bug (only for logged in users!)Click here to report a bug for this page (MaRDI item Q2344987)
