Newton-Fenner, Alice, Tyson-Carr, John 
ORCID: 0000-0003-3364-2184, Roberts, Hannah, Henderson, Jessica ORCID: 0000-0002-3816-5084, Hewitt, Danielle, Byrne, Adam, Fallon, Nicolas ORCID: 0000-0003-1451-6983, Gu, Yiquan, Gorelkina, Olga, Xie, Yuxin et al (show 3 more authors)
(2022)
Bid outcome processing in Vickrey auctions: An ERP study
PSYCHOPHYSIOLOGY, 59 (12).
e14125-.
ISSN 0048-5772, 1469-8986
Abstract
Online retailers often sell products using a socially competitive second-price sealed-bid auction known as a Vickrey auction (VA), an incentivized demand-revealing mechanism used to elicit players' subjective values. The VA presents a situation of risky decision-making, which typically implements value processing and a loss aversion mechanism. Neural outcome processing of VA bids are not known; this study explores this for the first time using EEG. Twenty-eight healthy participants bid on household items against an anonymous, computerized opponent. Bid outcome event-related potentials were predicted to differentiate between three conditions: outbid (no-win), large margin win (bargain), and small margin win (snatch). Individual loss aversion values were evaluated in a separate behavioral experiment offering gains or losses of variable amounts but equal chances against an assured gain. Processing outcomes of VA bids were associated with a feedback-related negativity (FRN) potential with a spatial maximum at the vertex (251–271 ms), where bargain win trials resulted in greater FRN amplitudes than snatch win trials. Additionally, a P300 potential was sensitive to win versus no-win outcomes and to retail price. Individual loss aversion level did not correlate with the strength of FRN or P300. Results show that outcome processing in a VA is associated with FRN that differentiates between relatively advantageous and less advantageous gains, and a P300 that distinguishes between the more and less expensive auction items. Our findings pave the way to an objective exploration of economic decision-making and purchasing behavior involving a widely popular auction.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | ERPs, FRN, P300, reward, Vickrey auction |
| Divisions: | Faculty of Health & Life Sciences Faculty of Health & Life Sciences > Inst. Population Health Faculty of Humanities & Social Sciences > School of Management |
| Depositing User: | Symplectic Admin |
| Date Deposited: | 22 Jun 2022 09:23 |
| Last Modified: | 16 Jun 2026 11:26 |
| DOI: | 10.1111/psyp.14125 |
| Open Access URL: | https://onlinelibrary.wiley.com/doi/10.1111/psyp.1... |
| Related Websites: | |
| URI: | https://livrepository.liverpool.ac.uk/id/eprint/3156969 |
| Disclaimer: | The University of Liverpool is not responsible for content contained on other websites from links within repository metadata. Please contact us if you notice anything that appears incorrect or inappropriate. |
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