The spite motive in third price auctions

Spite vs. Risk: Explaining Overbidding

“…Furthermore, we have treated spite only as a constant, independent of valuation and bid and identical for all members of the population. All these assumptions are taken from the current literature on spite in auctions (Bartling et al, 2017;Morgan et al, 2003;Brandt et al, 2007;Sandholm and Tang, 2012;Sandholm and Sharma, 2010;Mill, 2017) and make the theoretical approach easier and the solutions tractable. Further theoretical work, however, might relax these assumptions.…”

“…It can be taken from our paper that in some auctions spite is a better predictor for overbidding than risk, but this does not mean it is the better, or even a good, predictor in all auctions. For several auctions where overbidding has been observed, there have been made theoretical arguments that spite might be responsible (Morgan et al, 2003;Mill, 2017;Brandt et al, 2007). We provide empirical support for this statement for one choosen auction -the second-price allpay auction.…”

“…Morgan et al (2003) may have been the rst to consider spite in the equilibrium for winner-pay auctions. Similarly, Brandt et al (2007); Sandholm and Tang (2012); Sandholm and Sharma (2010); Mill (2017) study equilibrium bids with spiteful preferences for winnerpay auctions. Nishimura et al (2011) study spite in common-valuations-auctions and, most recently, Bartling et al (2017) consider equilibria where bidders could have spiteful preferences towards the auctioneer.…”

“…Hence, zero is the best choice. 13 SeeBartling et al (2017);Morgan et al (2003);Brandt et al (2007);Sandholm and Tang (2012);Sandholm and Sharma (2010);Mill (2017).…”