Do bidders require a monetary premium for cognitive effort in an auction?

Research output: Contribution to journalArticlepeer-review

7 Scopus citations

Abstract

Research on the influence of cognitive effort on decision making has grown in recent years. We argue that when cognitive effort is required, a decision maker requests a monetary premium for his effort. In our experiment, the participants were asked to bid a price for lotteries of differing complexity that required varying amounts of cognitive effort. Furthermore, some participants were given a simple calculator. We show that the increase in cognitive efforts increases the monetary premium they request, and leads to better pricing of similar lotteries.

Original languageEnglish
Pages (from-to)99-105
Number of pages7
JournalJournal of Socio-Economics
Volume42
DOIs
StatePublished - 1 Feb 2013
Externally publishedYes

Keywords

  • Cognitive effort
  • Demand effect
  • Lottery
  • Premium

ASJC Scopus subject areas

  • Economics and Econometrics

Fingerprint

Dive into the research topics of 'Do bidders require a monetary premium for cognitive effort in an auction?'. Together they form a unique fingerprint.

Cite this