Economists puzzled by irrational eBay buyers - USATODAY.com:
"Ulrike Malmendier, an economist at the University of California at Berkeley, tracked auctions of common items – things readily available online or in stores but offered on eBay at a discount.43%? WOW! VERY interesting and a boost for behavioral finance.
Most economists assume these kinds of auctions are largely immune to the passions and unpredictabilities of ravenous bidders, she says. Simple bargain hunting, they hope, would bring out our inner homo economicus, someone who acts in their self-interest to get the best deal possible.
No such luck, she says.....
But this is where eBay users fell prey to what Malmendier and her coauthor, Stanford University economist Hanh Lee, call 'bidder's curse.' Apparently, some bidders grew so enthusiastic about winning the auction that they lost sight of the 'buy it now' price..."We found that in 43% of the auctions the bidders ended up paying more than the 'buy it now' price," Malmendier says."
Speaking of interesting findings, when looking for the actual article that the USA Today piece was based on (here is a "Very Preliminary" version from a few years ago), I stumbled upon this by Stefano Della Vigno and Malmendier. It looks at what people pay for gym memberships and how often they actually go. (Gym time!)