A NOTE ON THE EXISTENCE OF STARTING POINT BIAS IN ITERATIVE BIDDING GAMES

Abstract

This note further illuminates the strength and direction of starting point bias in iterative bidding procedures. Conflicting recent findings concerning the starting point bias phenomenon are first briefly overviewed. The hypothesis that starting values influence valuations obtained in iterative bidding games is then tested in an experimental setting using widely disparate starting values ranging from $1 to$8,000. Statistically significant differences in mean final bidding outcomes were consistently detected in games using different starting values. This evidence, combined with test results reported elsewhere, strongly suggests that starting point value selection can have subtle but significant effects on observed final bids.Research Methods/ Statistical Methods,