Abstract
We test whether anchoring affects people's elicited valuations for a bottle of wine in individual decision making and in markets. We anchor subjects by asking them if they are willing to sell a bottle of wine for a transparently uninformative random price. We elicit subjects' Willingness-To-Accept for the bottle before and after the market. Subjects participate in a double auction market either in a small or a large trading group. The variance in subjects' Willingness-To-Accept shrinks within trading groups. Our evidence supports the idea that markets have the potential to diminish anchoring effects. However, the market is not needed: our anchoring manipulation failed in a large sample. In a concise meta-analysis, we identify the circumstances under which anchoring effects of preferences can be expected.
Original language | English |
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Pages (from-to) | 77-94 |
Number of pages | 18 |
Journal | Journal of the Economic Science Association |
Volume | 6 |
Issue number | 1 |
DOIs | |
Publication status | Published - 22 Jun 2020 |
Keywords
- Anchoring
- Replication
- Market
- Experiment