Do Auction Bidders 'Really' Want to Win the Item, or Do They Simply Want to Win?
Posted: 4 Aug 2005
Date Written: January 19, 2006
This article describes three experiments designed to investigate the effects of competition and attachment on auction bidder behavior. For each study, in order to isolate bidders' desire to win the item from bidders' desire to simply win the auction, we constructed survey experiments with participants divided into two groups. Both groups bid on a certificate that could be exchanged for an attractive gift, but for one of the groups the certificate number was changed, although the gift for which the certificate could be exchanged remained the same. In each experiment, the group with the changed certificate number bid significantly less. Our findings suggest that bidders are willing to bid significantly higher to win a specific item - in this case, a specific certificate number - than they are willing to bid to win a specific auction.
Keywords: Pseudo-Endowment Effect, Behavioral and experimental economics, Consumer decision making
JEL Classification: D1, D12, D80
Suggested Citation: Suggested Citation