Marketing Papers

Document Type

Technical Report

Date of this Version

3-2005

Publication Source

Management Science

Volume

51

Issue

3

Start Page

352

Last Page

364

DOI

10.1287/mnsc.1040.0331

Abstract

E-commerce has proved to be fertile ground for new business models, which may be patented (for up to 20 years) and have potentially far-reaching impact on the e-commerce landscape. One such electronic market is the reverse-auction model popularized by Priceline.com. There is still uncertainty surrounding the survival of such new electronic markets currently available on the Internet. Understanding user behavior is necessary for better assessment of these sites' survival. This paper adds to economic analysis a formal representation of the emotions evoked by the auction process, specifically, the excitement of winning if a bid is accepted, and the frustration of losing if it is not. We generate and empirically test a number of insights related to (1) the impact of expected excitement at winning, and frustration at losing, on bids across consumers and biddings scenarios; and (2) the dynamic nature of the bidding behavior—that is, how winning and losing in previous bids influence their future bidding behavior.

Copyright/Permission Statement

Originally published in Management Science © 2005 INFORMS

This is a pre-publication version. The final version is available at http://dx.doi.org/10.1287/mnsc.1040.0331.

Keywords

online auction design, electronic markets, pricing, behavioral decision models, experimental economics

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Date Posted: 15 June 2018

This document has been peer reviewed.