Thinking or Feeling the Risk in Online Auctions: The Effects of Priming Auction Outcomes and the Dual System on Risk Perception and Amount Bid

55 Pages Posted: 19 Sep 2012

See all articles by Yael Steinhart

Yael Steinhart

Independent

Michael A. Kamins

State University of New York (SUNY), Stony Brook

David Mazursky

Hebrew University of Jerusalem - Jerusalem School of Business Administration; Bocconi University - Department of Marketing

Avraham Noy

affiliation not provided to SSRN

Date Written: September 19, 2012

Abstract

The present research sheds new light on the antecedents and outcomes of bidders‘ perceived risk. It examines the role of the two-system model in the context of activating the potential to either win or lose an online auction. This study demonstrates that when a bidder‘s affective system is primed, concern about losing the item is greater and ultimately the bid amount is higher when the bidder expects to lose rather than win. Conversely, when the cognitive system is primed, the anticipated goals of winning the auction - rather than the fear of losing - drive the bidder‘s actions. In the latter case, the bidder pays a higher amount if the expectancy of winning is primed, as opposed to the expectancy of losing. A field study on eBay and two lab studies confirm this phenomenon.

Keywords: perceived risk of losing, two-system model, online auctions

Suggested Citation

Steinhart, Yael and Kamins, Michael A. and Mazursky, David and Mazursky, David and Noy, Avraham, Thinking or Feeling the Risk in Online Auctions: The Effects of Priming Auction Outcomes and the Dual System on Risk Perception and Amount Bid (September 19, 2012). Available at SSRN: https://ssrn.com/abstract=2148891 or http://dx.doi.org/10.2139/ssrn.2148891

Michael A. Kamins

State University of New York (SUNY), Stony Brook ( email )

Health Science Center
Stony Brook, NY
United States

David Mazursky

Bocconi University - Department of Marketing ( email )

Via Roentgen 1
Milan, 20136
Italy

Hebrew University of Jerusalem - Jerusalem School of Business Administration ( email )

Mount Scopus
Jerusalem, 91905
Israel
02-5883217 (Phone)

Avraham Noy

affiliation not provided to SSRN ( email )

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