Anchoring effects in an experimental auction - Are farmers anchored?

Auctioning goods is a widespread practice, particularly in the agricultural sector. The outcome 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 - that is, live events that are not taking place on the internet - is largely unknown. For this reason, we analyze anchoring effects of exogenously provided values using an experimental common value auction with entrepreneurs. In total, 48 groups each made of five farmers 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 either result in negative adjustment in open bid auctions, or no adjustment in closed-seal bid auctions. Furthermore, the results show that previous bids affect following bids, which may also be an anchoring effect.