Bidding behavior given point and interval values in a second-price auction

•We investigate preference elicitation when we treat behavioralist with coherent arbitrariness as rational and vise-versa.•We use a second-price auction to test bidding behavior given either point or interval values and either point and interval bidding.•People prefer the flexibility of the interval bid, but they behave rationally as expected bids are mostly expected values.

Although rational choice theory presumes people have a point estimate of their willingness to pay (WTP) for a good or service, the idea of coherent arbitrariness suggests they have an interval of values. Herein we explore bidding behavior in a second-price auction in which bidders have point or interval values and point or interval bidding. We find bidders bid rationally: (i) when bidders have a point value but are asked to state an interval bid, they choose to bid as an interval with the point value as the mean of the interval; (ii) bidders who had a value interval but are asked to bid as a point estimate bid the expected value from the interval; and (iii) bidders with an interval value and who bid an interval such that expected bids equate expected values.