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.

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 July 29, 2014 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 July 29, 2014).

Share This




More Mind & Brain News

Tuesday, July 29, 2014

Featured Research

from universities, journals, and other organizations


Featured Videos

from AP, Reuters, AFP, and other news services

It's Not Just Facebook: OKCupid Experiments With Users Too

It's Not Just Facebook: OKCupid Experiments With Users Too

Newsy (July 29, 2014) If you've been looking for love online, there's a chance somebody has been looking at how you're looking. Video provided by Newsy
Powered by NewsLook.com
How Your Face Can Leave A Good Or Bad First Impression

How Your Face Can Leave A Good Or Bad First Impression

Newsy (July 29, 2014) Researchers have found certain facial features can make us seem more attractive or trustworthy. Video provided by Newsy
Powered by NewsLook.com
Losing Sleep Leaves You Vulnerable To 'False Memories'

Losing Sleep Leaves You Vulnerable To 'False Memories'

Newsy (July 27, 2014) A new study shows sleep deprivation can make it harder for people to remember specific details of an event. Video provided by Newsy
Powered by NewsLook.com
University Quiz Implies Atheists Are Smarter Than Christians

University Quiz Implies Atheists Are Smarter Than Christians

Newsy (July 25, 2014) An online quiz from a required course at Ohio State is making waves for suggesting atheists are inherently smarter than Christians. Video provided by Newsy
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:
from the past week

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