Bidding Behavior in Descending and Ascending Auctions

Amar Cheema (), Dipankar Chakravarti () and Atanu R. Sinha ()
Additional contact information
Amar Cheema: McIntire School of Commerce, University of Virginia, Charlottesville, Virginia 22903
Dipankar Chakravarti: Carey Business School, Johns Hopkins University, Baltimore, Maryland 21202
Atanu R. Sinha: Leeds School of Business, University of Colorado, Boulder, Colorado 80309

Marketing Science, 2012, vol. 31, issue 5, 779-800

Abstract: This research examines how individual differences and institutional practices influence consumer bidding in auctions. Bidders may be motivated by different goals, e.g., thrill (of winning the item, with minimal attention to what they pay for it) versus prudence (winning the item at a price at or below its perceived value). Also, innate or auctioneer-induced differences may exist in the precision and salience of bidder cognitions about the item's value. We report two studies on how these motivational and cognitive factors influence bids in descending and ascending auctions, respectively. Each study also manipulated a situational variable ( wait time at each price step). The two auctions realized different average prices for the same item set. Average bids were higher in the descending (versus ascending) auction in several study conditions. In both auction formats, bidders primed with thrill (versus prudence) bid higher, but more precise and/or salient values attenuated this goal effect. Among other results, in the descending auction, longer wait times elicited higher bids from bidders primed with thrill (but not prudence). In the ascending auction, longer wait times produced lower bids for bidders primed with prudence (but not thrill). These findings on consumer bidding behavior have practical implications for auction design.

Keywords: auctions; bidding; goals; pricing; value (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

Downloads: (external link)
http://dx.doi.org/10.1287/mksc.1120.0730 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:ormksc:v:31:y:2012:i:5:p:779-800

Access Statistics for this article

More articles in Marketing Science from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().