Anchoring effects in an experimental auction – Are farmers anchored?

Holst, Gesa Sophie; Hermann, Daniel; Mußhoff, Oliver

doi:10.1016/j.joep.2015.03.008

Cited by 16 publications

(16 citation statements)

References 52 publications

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“…Duclos, 2015), and even offline agricultural auctions (e.g. Holst et al , 2015), however, few have examined such effect on reward-based crowdfunding. This study integrates the anchoring effect with the range theory to further understand the effect of point offer, adjustable point offer, and bolstering range offer on the pledge amount in reward-based crowdfunded pledge option designs.…”

Section: Discussionmentioning

confidence: 99%

“…He found that if the closing prices of the previous day were higher than the opening price today, the anchor would raise people's anticipations of the future stock price, and they would be inclined to invest more. Meanwhile, Holst et al (2015) found that the transaction price of the earlier successful auctions would influence the price in the subsequent auctions in the agricultural setting. Examining the effect of traveler reviews, Book et al (2016) concluded that when positive reviews occur for a resort, travelers scrutinized the resort less and, their price decision-making will be more likely affected by the pricing anchors.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

“…In stock markets and offline agricultural auctions, subsequent predictions of stock prices and commodity bids are influenced by upfront trading prices (Duclos, 2015; Holst et al , 2015). In the context of the crowdfunding platform, Burtch et al (2013b) indicated that anchoring effects occur on subsequent backers' amounts pledged if previous backers' pledge amounts are shown during the fundraising process.…”

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

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The effects of anchoring on backers' pledge in reward-based crowdfunding: evidence from Taiwanese market

Kuo

Lin

Hou

2020

INTR

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PurposeCrowdfunding allows enterprises or individuals to collect funds from numerous other individuals. This study applies the anchoring effect and range theory in reward-based crowdfunding to explore how different pledge option designs affect the backers' final pledge amount. Moreover, this study examines whether showing the current average amount pledged in the fundraising process has an anchoring effect on the subsequent backers' pledge amount.Design/methodology/approachOnline experiments were conducted, and data were analyzed using the Kruskal–Wallis test and Spearman rank correlation analysis.FindingsResults show that among the three pledge option designs, employing the “bolstering range offer” has the highest backing amount. However, presenting the current average amount pledged in the fundraising process has a reversed anchoring effect on subsequent backers' pledge amount only in the case of a crowdfunding project in the physical goods category with a “point offer.”Originality/valueTo the best of authors’ knowledge, no reward-based crowdfunding platform has yet provided the pledge option design of a “bolstering range offer.” This study reveals that the “bolstering range offer” can significantly increase the amount pledged. This study extends the crowdfunding research area to crowdfunding success and suggests a novel way to set up pledges.

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Section: Discussionmentioning

confidence: 99%

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

Section: Literature Review and Hypothesis Developmentmentioning

confidence: 99%

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The effects of anchoring on backers' pledge in reward-based crowdfunding: evidence from Taiwanese market

Kuo

Lin

Hou

2020

INTR

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“…Ariely et al ( 2003 ) showed that valuations of familiar market goods are strongly influenced by anchors, questioning the economic assumption of market valuation based on one’s willingness to pay. Holst et al ( 2015 ) noticed that previous bids affected subsequent bids in an auction experiment even when the odds of success remained static. The initial anchoring, it seems, quickly superseded more “rational” attributes such as how much the good is actually worth and the likelihood to obtain a good deal.…”

Section: Introductionmentioning

confidence: 99%

Student Loan Decision Making: Experience as an Anchor

2021

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The purpose of study is to examine the association between one's past borrowing experience and borrowing decisions in a hypothetical survey scenario. A total of 1928 responses from an online survey panel were analyzed, with a built-in anchoring question. Using the concept of anchoring bias as a reference point, survey participants were shown a hypothetical scenario regarding college attendance and asked two relevant questions: is it wise to attend college and how much student loans one should take out to attend college. Results indicated that the more one borrowed personally, the more one is likely to think a higher amount being borrowed by a hypothetical high-school graduate is prudent. This connection between experience and present advice can be described as a novel anchoring effect.

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“…Anchors are also found to affect actual behaviour, including consumer bidding in auctions (e.g. [6,7,8]), consumer purchases [9], and valuations of consumer goods with probabilistically binding choices (e.g. [10, 11]) although Fudenberg et al (2012) [12] do not replicate the findings in [11].…”

Section: Introductionmentioning

confidence: 99%

The Effect of Anchors and Social Information on Behaviour

Fouquet¹,

Sisco²

2019

SSRN Journal

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We use a 'multi-player dictator game' (MDG), with 'social information' about the monetary transfer made by a previous dictator to a recipient, to examine whether average contributions as well as the behavioural strategy adopted are affected by the first amount presented (the 'anchor') using a sequential strategy elicitation method. We find that average contributions are positively affected by the anchor. The anchor is also found to influence the behavioural strategy that individuals adopt, such that low anchors significantly increase the likelihood that players will adopt unconditional self-interested strategies, whereas high anchors increase the likelihood of adopting giving strategies. The distribution of strategiesand hence, the distribution of behavioural 'types'-is therefore affected by the initial conditions of play, lending support to the notion that behavioural strategies are context dependent.

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Anchoring effects in an experimental auction – Are farmers anchored?

Cited by 16 publications

References 52 publications

The effects of anchoring on backers' pledge in reward-based crowdfunding: evidence from Taiwanese market

The effects of anchoring on backers' pledge in reward-based crowdfunding: evidence from Taiwanese market

Student Loan Decision Making: Experience as an Anchor

The Effect of Anchors and Social Information on Behaviour

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