Optimistic overconfidence in electronic reverse auctions

Autor(en)
Aysegül Engin, Rudolf Vetschera
Abstrakt

Optimistic overconfidence, the overly optimistic view of uncertain events, can significantly impact bidding behavior in auctions. This bias so far has been mainly seen as a cause for the winner’s curse in common value auctions. In the present paper, we experimentally study overconfidence in the context of electronic reverse auctions. Here, overconfidence might lead to misperceptions of the bidder’s own cost situation, and of the probability of winning. We also study interactions of overconfidence with other psychometric properties of the bidder, and the format of information presentation. Both factors could mitigate the impact of overconfidence. Our results indicate that overconfidence leads to a more optimistic view of winning the auction and to more aggressive bidding. Its effect can be mitigated if bidders have a high risk literacy, but possibilities to influence it by better information representation are limited.

Organisation(en)
Institut für Business Decisions and Analytics
Journal
Electronic Commerce Research and Applications
Band
35
Anzahl der Seiten
10
ISSN
1567-4223
DOI
https://doi.org/10.1016/j.elerap.2019.100842
Publikationsdatum
2019
Peer-reviewed
Ja
ÖFOS 2012
502052 Betriebswirtschaftslehre
Schlagwörter
ASJC Scopus Sachgebiete
Management of Technology and Innovation, Marketing, Computer Networks and Communications, Computer Science Applications
Link zum Portal
https://ucris.univie.ac.at/portal/de/publications/optimistic-overconfidence-in-electronic-reverse-auctions(59edf604-3aab-4e40-b740-850da1a52bba).html