Self serving reference points in double auctions |
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Authors: | Husnain Fateh Ahmad |
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Institution: | Department of Economics, Sewanee: The University of the South, Sewanee, TN, USA |
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Abstract: | We present a novel approach for modelling self serving bias by way of reference dependence. Bias is modelled as a systematic individual level deviation of the endogenous reference point from the expected price of a good in a two person k-double auction. We find that bias decreases the efficiency of the model, and that efficiency is decreasing in both the level of bias and reference dependence. |
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Keywords: | consistent reference point double auctions reference dependence self serving bias D03 D44 |
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