Emotion Regulation and Bidding in Auctions

Table of Contents

1 Introduction

2 Emotion regulation

2.1 Basic principles by Gross

2.1.1 Emotion regulation strategies

2.1.2 Effects and consequences

2.1.3 Psychophysiological measures

2.2 Heart rate variability (HRV)

2.2.1 Emotions and heart rhythm patterns

2.2.2 Physiological basics of HRV

2.2.3 HRV analysis

2.3 Existing experimental studies in economics

2.3.1 The Ultimatum Game

2.3.2 The Framing Effect

2.3.3 Decision-making under risk and uncertainty

2.3.4 Auctions and financial market

2.3.5 Overview

3 Experimental results

3.1 Experiments

3.1.1 All experiments

3.1.2 Regret experiment

3.1.3 Emotion induction experiment

3.1.4 Human versus computer experiment

3.2 Discussion

4 Conclusion and outlook

Objectives and Research Themes

The primary objective of this thesis is to investigate the influence of different emotion regulation strategies and the resulting emotional state on bidding behavior in first-price sealed bid auctions. By integrating physiological measurements, specifically heart rate variability (HRV), the research aims to establish an objective link between an individual's autonomic nervous system function and their economic decision-making processes.

• Analysis of emotion regulation strategies (reappraisal vs. suppression) in economic contexts.
• Application of HRV as a physiological biomarker for inhibitory control and emotional regulation capacity.
• Empirical examination of three distinct experimental auction setups to observe bidding behavior.
• Evaluation of the correlation between risk attitudes and physiological indicators in financial decision-making.

Excerpt from the Thesis

Summary of Chapters

1 Introduction: Provides a theoretical foundation for the intersection of emotion theory and economic decision-making, emphasizing the importance of physiological measures like HRV.

2 Emotion regulation: Details Gross’s process model of emotion regulation, physiological basics of heart rate variability, and provides a literature review of existing experiments in economics.

3 Experimental results: Describes the methodology and empirical analysis of three specific laboratory experiments investigating the relationship between HRV, emotion regulation, and bidding behavior.

4 Conclusion and outlook: Summarizes the key empirical findings, discusses the observed inconsistencies in the data, and proposes avenues for future research in auction design.

Keywords

Emotion Regulation, Bidding Behavior, Auctions, Heart Rate Variability, HRV, Physiological Measures, Cognitive Reappraisal, Expressive Suppression, Economic Decision-Making, Inhibitory Control, Autonomic Nervous System, Risk Aversion, First-Price Sealed Bid, Experimental Economics.

Frequently Asked Questions

What is the fundamental scope of this research?

The thesis explores the complex interaction between human emotional regulation mechanisms and their subsequent impact on rational bidding strategies in economic auction environments.

What are the central thematic areas?

The core themes include the application of Gross’s process model of emotion regulation, the use of HRV as a proxy for autonomic function, and the comparative analysis of bidding behaviors in specific experimental auction scenarios.

What is the primary research question?

The study asks whether individual differences in emotion regulation, as indicated by resting HRV, predict bidding behavior and risk-taking tendencies in first-price sealed bid auctions.

Which scientific methods were employed?

The author conducted three separate laboratory experiments (Regret, Emotion Induction, and Human vs. Computer) and utilized statistical methods, specifically linear regression analysis, to evaluate the relationship between physiological data and auction bids.

What does the main body of the work encompass?

It encompasses a detailed breakdown of experimental design, data analysis from the three studies, and an extensive discussion on how physiological arousal influences decision-making in competitive environments.

Which keywords characterize this work?

Key terms include Emotion Regulation, Heart Rate Variability (HRV), First-Price Sealed Bid (FPSB) Auctions, Cognitive Reappraisal, and Expressive Suppression.

How does the "Regret Experiment" influence the research findings?

This experiment specifically addresses how information feedback concerning "loser regret" and "winner regret" triggers different emotional responses, which in turn statistically alters the bid/value ratio in subsequent auction rounds.

What role does the "Human versus Computer" experiment play?

This experiment tests the hypothesis that playing against a human opponent triggers higher emotional arousal than a computer opponent, and analyzes whether this difference in arousal manifests as a change in the participant's bidding strategy.