Featured Research

from universities, journals, and other organizations

Bidding Frenzy Diagnosed

Date:
March 2, 2005
Source:
University Of Alberta
Summary:
Eager buyers who get swept up in the excitement of an auction and end up regretting it can take some comfort in knowing why: bidding frenzy, a condition uncovered by University of Alberta researchers.

Eager buyers who get swept up in the excitement of an auction and end up regretting it can take some comfort in knowing why: bidding frenzy, a condition uncovered by University of Alberta researchers.

Related Articles


The more intense the bidding is at an auction, the more likely it is that a buyer will be gripped by bidding frenzy, said Dr. Peter Popkowski Leszczyc, a marketing professor at the University of Alberta School of Business.

"It is a mental state characterized by a high level of arousal or excitement, a sense of competition, and a strong desire to win," said Dr. Popkowski Leszczyc. "We believe greater levels of bidding frenzy will cause consumers to value an auctioned product more highly."

The research was presented recently in a paper at the 9th Behavioral Decision Research in Management Conference, hosted by the Fuqua School of Business at Duke University.

Bidding frenzy poses potential pitfalls for buyers, as logic loses out to human competitiveness, Dr. Popkowski Leszczyc said. "Recently an unknown painting sold online for 70,000 pounds after some bidders started a bidding war. The actual painting was probably worth about 100 pounds."

He believes that bidding frenzy is a similar problem to gambling addiction. "There is some similarity in the adrenaline rush of winning the auction, or even just the last-minute bidding. Some people spend hours a day online, purchasing hundreds of items a year."

In the study, Dr. Popkowski Leszczyc and his colleague Dr. Gerald Haubl conducted five lab experiments comparing consumers' online bidding behavior under two auction types: an open ascending bid (English) auction--the most common type where bidders compete directly; and sealed-bid auctions, in which bidders can only bid once, usually by writing it down.

They discovered that items were more highly valued in the English auction format, as it allowed dynamic interaction among bidders with publicly available high bids. The study also revealed that both greater frequency of arrival of rival bids and a smaller perceived number of bidders lead to higher value being put on the auction item.

The study also showed that for bidding frenzy to take hold, an auction participant must be competing directly with other human bidders rather than with a pre-programmed electronic bidding agent.


Story Source:

The above story is based on materials provided by University Of Alberta. Note: Materials may be edited for content and length.


Cite This Page:

University Of Alberta. "Bidding Frenzy Diagnosed." ScienceDaily. ScienceDaily, 2 March 2005. <www.sciencedaily.com/releases/2005/02/050224122006.htm>.
University Of Alberta. (2005, March 2). Bidding Frenzy Diagnosed. ScienceDaily. Retrieved January 25, 2015 from www.sciencedaily.com/releases/2005/02/050224122006.htm
University Of Alberta. "Bidding Frenzy Diagnosed." ScienceDaily. www.sciencedaily.com/releases/2005/02/050224122006.htm (accessed January 25, 2015).

Share This


More From ScienceDaily



More Mind & Brain News

Sunday, January 25, 2015

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

Smart Wristband to Shock Away Bad Habits

Smart Wristband to Shock Away Bad Habits

Reuters - Innovations Video Online (Jan. 23, 2015) — A Boston start-up is developing a wristband they say will help users break bad habits by jolting them with an electric shock. Ben Gruber reports. Video provided by Reuters
Powered by NewsLook.com
Amazing Technology Allows Blind Mother to See Her Newborn Son

Amazing Technology Allows Blind Mother to See Her Newborn Son

RightThisMinute (Jan. 23, 2015) — Not only is Kathy seeing her newborn son for the first time, but this is actually the first time she has ever seen a baby. Kathy and her sister, Yvonne, have been legally blind since childhood, but thanks to an amazing new technology, eSight glasses, which gives those who are legally blind the ability to see, she got the chance to see the birth of her son. It&apos;s an incredible moment and an even better story. Video provided by RightThisMinute
Powered by NewsLook.com
One Dose, Then Surgery to Test Tumor Drugs Fast

One Dose, Then Surgery to Test Tumor Drugs Fast

AP (Jan. 23, 2015) — A Phoenix hospital is experimenting with a faster way to test much needed medications for deadly brain tumors. Patients get a single dose of a potential drug, and hours later have their tumor removed to see if the drug had any affect. (Jan. 23) Video provided by AP
Powered by NewsLook.com
The Best Bedtime Rituals For a Good Night's Sleep

The Best Bedtime Rituals For a Good Night's Sleep

Buzz60 (Jan. 22, 2015) — What you do before bed can effect how well you sleep. TC Newman (@PurpleTCNewman) has bedtime rituals to induce the best night&apos;s sleep. Video provided by Buzz60
Powered by NewsLook.com

Search ScienceDaily

Number of stories in archives: 140,361

Find with keyword(s):
 
Enter a keyword or phrase to search ScienceDaily for related topics and research stories.

Save/Print:
Share:  

Breaking News:

Strange & Offbeat Stories

 

Health & Medicine

Mind & Brain

Living & Well

In Other News

... from NewsDaily.com

Science News

Health News

Environment News

Technology News



Save/Print:
Share:  

Free Subscriptions


Get the latest science news with ScienceDaily's free email newsletters, updated daily and weekly. Or view hourly updated newsfeeds in your RSS reader:

Get Social & Mobile


Keep up to date with the latest news from ScienceDaily via social networks and mobile apps:

Have Feedback?


Tell us what you think of ScienceDaily -- we welcome both positive and negative comments. Have any problems using the site? Questions?
Mobile iPhone Android Web
Follow Facebook Twitter Google+
Subscribe RSS Feeds Email Newsletters
Latest Headlines Health & Medicine Mind & Brain Space & Time Matter & Energy Computers & Math Plants & Animals Earth & Climate Fossils & Ruins