Effects of simultaneous auctions on willingness-to-pay in online auctions

Abstract

In this paper, the authors argue that auctions are not only affected by their information cues but also contrasting, peripheral information cues from adjacent auction listings. The authors examine the effects of time urgency and persuasion intent on the processing of this contrasting peripheral information. Using two controlled experiments and an empirical field study, the authors show that time urgency experienced by bidders in online auctions results in increased heuristic processing of contrasting information from adjacent auction listings. The authors also found that bidders will discount contrasting peripheral information if they perceive salient persuasion intents in advertising presented by the auctioneers. The resulting contrast effects ultimately lead to changes in willingness to pay. The following is an extended abstract. The full version of the paper can be obtained from any of the authors.