This paper considers whether earned wealth affects bidding behavior in an induced-value second-price auction. We find people bid more sincerely in the auction with earned wealth given monetary incentives; earned wealth did not induce sincere bidding in hypothetical auctions.

Hypothetical bias is a long-standing issue in stated preference and contingent valuation studies – people generally overstate their preferences when they do not experience the real monetary consequences of their decision. This view, however, has been challenged by recent evidence based on the...

Hypothetical bias is a long-standing issue in stated preference and contingent valuation studies - people tend to overstate their preferences when they do not experience the real monetary consequences of their decision. This view, however, has been challenged by recent evidence based on the...

Recent work in experimental economics has explored whether observed behavior depends on whether wealth was windfall or earned. This paper extends this work by considering whether earned wealth ffects bidding behavior in an induced-value second-price auction. We find people bid more sincerely in...

Do French Students really bid sincerely in real and hypothetical incentive compatible auctions? Recent evidence suggests they do, which goes counter to most observed bidding behavior in theUnited States, and supports the idea that cultural differences may explain bidding behavior more than...