Anchoring Effects in an Experimental Auction

Auctioning goods is a widespread practice, particularly in the agricultural sector. The out-come of auctions can be affected by various factors. One of these factors can be anchoring effects, which describe the influence of present available information on numerical values in human decisions. However, the influence of anchoring effects in auctions carried out offline is largely unknown. For this reason, we analyze anchoring effects of exogenously provided values using an experimental auction with farmers. In total, 48 groups of five farmers each participate in a series of four auctions for envelopes containing a €10 banknote with a 50% probability of occurrence. Our results indicate that anchoring based on exogenously presented values can result either in negative adjustment or no adjustment depending on the auction characteristic. Furthermore, the results show that previous bids affect following bids, which might also be an anchoring effect.