Revisiting Cash Endowment and House Money Effects in an Experimental Auction of a Novel Agri-food Product in the Philippines

Creator

Dinah Pura T. Depositario, University of the Philippines Los Banos
Rodolfo M. Nayga, University of Arkansas - Fayetteville
Yu Yvette Zhang, Texas A&M University
Robert Dominick E. Mariano, University of the Philippines Los Banos

Issue Date

6-2014

Abstract

This study explores the effect of varying cash endowments on bidding behavior in auction experiments conducted in a developing country. Our results suggest that cash endowment levels can have different effects on bidding behavior under second price auction and random nth price auction. In contrast to past studies conducted in developed countries, we generally do not see the presence of positive house money effect in our results. If behavior varies significantly as the cash endowment is varied, then care must be taken when designing auction experiments or when comparing results to other experimental results and theoretical predictions.Asian Economic Journal © 2014 East Asian Economic Association and Wiley Publishing Asia Pty Ltd.

Source or Periodical Title

Asian Economic Journal

ISSN

1351-3958

Volume

28

Issue

2

Page

201-215

Document Type

Article

Subject

Agri-food product, Bidding behaviour, C91, C92, Cash endowment effect, House money effect, Random nth-price auction, Second price auction

Recommended Citation

Depositario, D.P.T., Nayga, R.M., Zhang, Y.Y., Mariano, R.D.E. (2014). Revisiting Cash Endowment and House Money Effects in an Experimental Auction of a Novel Agri‐food Product in the Philippines. Asian Economic Journal, 28 (2), 201-215. doi:10.1111/asej.12033.

Identifier

doi:10.1111/asej.12033.

Digital Copy

yes