Forum for Science, Industry and Business

Sponsored by:     3M 
Search our Site:

 

Bidding frenzy diagnosed

24.02.2005


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.

Bev Betkowski | EurekAlert!
Further information:
http://www.ualberta.ca

More articles from Studies and Analyses:

nachricht Drone vs. truck deliveries: Which create less carbon pollution?
31.05.2017 | University of Washington

nachricht New study: How does Europe become a leading player for software and IT services?
03.04.2017 | Fraunhofer-Institut für System- und Innovationsforschung (ISI)

All articles from Studies and Analyses >>>

The most recent press releases about innovation >>>

Die letzten 5 Focus-News des innovations-reports im Überblick:

Im Focus: Can we see monkeys from space? Emerging technologies to map biodiversity

An international team of scientists has proposed a new multi-disciplinary approach in which an array of new technologies will allow us to map biodiversity and the risks that wildlife is facing at the scale of whole landscapes. The findings are published in Nature Ecology and Evolution. This international research is led by the Kunming Institute of Zoology from China, University of East Anglia, University of Leicester and the Leibniz Institute for Zoo and Wildlife Research.

Using a combination of satellite and ground data, the team proposes that it is now possible to map biodiversity with an accuracy that has not been previously...

Im Focus: Climate satellite: Tracking methane with robust laser technology

Heatwaves in the Arctic, longer periods of vegetation in Europe, severe floods in West Africa – starting in 2021, scientists want to explore the emissions of the greenhouse gas methane with the German-French satellite MERLIN. This is made possible by a new robust laser system of the Fraunhofer Institute for Laser Technology ILT in Aachen, which achieves unprecedented measurement accuracy.

Methane is primarily the result of the decomposition of organic matter. The gas has a 25 times greater warming potential than carbon dioxide, but is not as...

Im Focus: How protons move through a fuel cell

Hydrogen is regarded as the energy source of the future: It is produced with solar power and can be used to generate heat and electricity in fuel cells. Empa researchers have now succeeded in decoding the movement of hydrogen ions in crystals – a key step towards more efficient energy conversion in the hydrogen industry of tomorrow.

As charge carriers, electrons and ions play the leading role in electrochemical energy storage devices and converters such as batteries and fuel cells. Proton...

Im Focus: A unique data centre for cosmological simulations

Scientists from the Excellence Cluster Universe at the Ludwig-Maximilians-Universität Munich have establised "Cosmowebportal", a unique data centre for cosmological simulations located at the Leibniz Supercomputing Centre (LRZ) of the Bavarian Academy of Sciences. The complete results of a series of large hydrodynamical cosmological simulations are available, with data volumes typically exceeding several hundred terabytes. Scientists worldwide can interactively explore these complex simulations via a web interface and directly access the results.

With current telescopes, scientists can observe our Universe’s galaxies and galaxy clusters and their distribution along an invisible cosmic web. From the...

Im Focus: Scientists develop molecular thermometer for contactless measurement using infrared light

Temperature measurements possible even on the smallest scale / Molecular ruby for use in material sciences, biology, and medicine

Chemists at Johannes Gutenberg University Mainz (JGU) in cooperation with researchers of the German Federal Institute for Materials Research and Testing (BAM)...

All Focus news of the innovation-report >>>

Anzeige

Anzeige

Event News

Plants are networkers

19.06.2017 | Event News

Digital Survival Training for Executives

13.06.2017 | Event News

Global Learning Council Summit 2017

13.06.2017 | Event News

 
Latest News

Individualized fiber components for the world market

23.06.2017 | Physics and Astronomy

How brains surrender to sleep

23.06.2017 | Life Sciences

Can we see monkeys from space? Emerging technologies to map biodiversity

23.06.2017 | Information Technology

VideoLinks
B2B-VideoLinks
More VideoLinks >>>