Title
Auction Fever: The Effect of Opponents and Quasi-Endowment on Product Valuations
Department/School
Marketing
Date of this version
9-2004
Document Type
Article
DOI
https://doi.org/10.1002/dir.20020
Abstract
The wide adoption of dynamic second-price auctions as the format of choice for Internet-based (online) transactions has created an interest in understanding how individuals behave in such environments. The current work concentrates on two dynamic effects, which we call quasi-endowment and opponent effect, and finds that these effects may result in over-bidding. The results of two experimental auctions – one involving hypothetical bids and the other real-money bids – demonstrate that bids reflect valuations that include the non-normative influences of the two factors. Quasi-endowment and opponent effects could lead to the behaviors of repeated bidding and sniping commonly observed in second-price online auctions such as eBay.
Volume
18
Issue
4
Published in
Journal of Interactive Marketing
Citation/Other Information
Heyman, J. E., Orhun, Y., & Ariely, D. (2004). Auction fever: The effect of opponents and quasi-endowment on product valuations. Journal of Interactive Marketing, 18(4), 7–21. https://doi.org/10.1002/dir.20020