Ms Malmendier and Mr Nagel examined detailed survey data about American households' finances between 1964 and 2004.

“Almost half of all auctions contain overbidding, ” says Assistant Prof. Ulrike Malmendier of the University of California, Berkeley.

Malmendier and colleague Young Han Lee found that some eBay winners could have gotten higher-quality goods from more reputable sellers and paid less-by buying at a set amount.