Latest / Behavioral Economics with Fexingo: Decision Making, Bias, and How People Really Spend
Why Your Brain Treats an Auction as a Gamble
In this episode of Behavioral Economics with Fexingo, Lucas and Luna explore the psychology of auctions—why your brain treats bidding like a gamble even when you plan to be rational. They dissect the 'winner's curse' phenomenon using eBay data showing that winning bidders overpay by an average of 30 percent above their pre-auction limit. They discuss how auction design (reserve prices, countdown timers, competing bids) triggers loss aversion and the sunk cost fallacy, turning a simple transaction into an emotional contest. Lucas draws on a 2024 study from the University of…
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