We investigate both theoretically and experimentally the role that information disclosure has on behavior in all pay environments in which all agents must exert costly effort, but only the winner is rewarded. Through the lens of all pay auctions, we show that bidders who have regret concerns when they lose an auction may alter their bids. Whether or not information about the winning bid is disclosed, all losing bidders regret not bidding 0. However, when feedback on the winning bid is provided, those bidders who lost at an affordable price may regret not bidding more.
Rent Seeking with Regretful Agents: Theory and ExperimentKyle Hyndman, Erkut Ozbay, and Pacharasut Sujarittanonta ,
3( 84 )
Journal of Economic Behavior and Organization