Bid outcome processing in Vickrey auctions: An ERP study

Abstract

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A comparison of reward processing during Becker–DeGroot–Marschak and Vickrey auctions: An ERP study

“…The amplitudes of the N170 and P3 components, but not the RewP, were modulated by SV in both types of auctions, with greater amplitudes for high‐ than low‐value auction items. The insensitivity of the RewP to SV as dictated by bid value is in line with findings from our previous VA study, where the RewP was indifferent to the market value of the auction items (Newton‐Fenner et al, 2022 ). The more positive P3 amplitude potentials following high SV outcomes compared to low SV items may be linked to attentional engagement (Nieuwenhuis, Aston‐Jones, et al, 2005; San Martin, 2012 ; Yeung & Sanfey, 2004 ).…”

“…The P3 is also sensitive to outcome magnitude, with larger rewards/losses eliciting greater amplitudes (Bellebaum & Daum, 2008 ; Yeung & Sanfey, 2004 ). Relevantly, in our most recent study using a VA task, auction outcomes were associated with larger P3 amplitudes for high‐market value than low‐market value items, and win outcomes compared to no‐win outcomes (Newton‐Fenner et al, 2022 ). Similarly, Tyson‐Carr et al ( 2018 ) also found during a BDM task that high‐value products produced increased activation in the P3 interval during the initial valuation period.…”

“…The RewP is also sensitive to outcome magnitude (Goyer et al, 2008;Gu et al, 2011;Sambrook & Goslin, 2015) and salience (Hauser et al, 2014;Talmi et al, 2013;Walentowska et al, 2019;Yeung et al, 2005). However, the RewP was not sensitive to reward magnitude in our previous VA study (Newton-Fenner et al, 2022), as characterized by auction item market value.…”

Economic value in the Brain: A meta-analysis of willingness-to-pay using the Becker-DeGroot-Marschak auction

“…It should be acknowledged that the BDM has been found to be not incentive compatible in certain circumstances, such as when the object being valued is a lottery [158]. Furthermore, there is evidence that bid values in secondprice sealed bid auctions can be impacted by subjective perceptions of uncertainty [159] and social competition [160]. Furthermore, the decision to focus on the BDM task, while allowing a clean analysis of SV computation without the confounding effects of task heterogeneity, resulted in a smaller final cohort.…”