Economics, Psychology, and Social Dynamics of Consumer Bidding in Auctions

With increasing numbers of consumers in auction marketplaces, we highlight some recent approaches that bring additional economic, social, and psychological factors to bear on existing economic theory to better understand and explain consumers' behavior in auctions. We also highlight specific research streams that could contribute towards enriching existing economic models of bidding behavior in emerging market mechanisms. This paper is based on the special session at the 6th Triennial Invitational Choice Symposium, University of Colorado Boulder, June 2004 (co-chaired by the first two authors).     

An Empirical Analysis of Bidding Fees in Name-your-own-price Auctions

Interactive pricing mechanisms integrate customers into the price-setting process by letting them submit bids. Name-your-own-price auctions are such an interactive pricing mechanism, where buyers' bids denote the final price of a product or service in case they surpass a secret threshold price set by the seller. If buyers are given the flexibility to bid repeatedly, they might try to incrementally bid up to the threshold. In this case, charging fees for the option to place additional bids could generate extra revenue and reduce incremental bidding behavior. Based on an economic model of consumer bidding behavior in name-your-own-price auctions and two empirical studies, we analytically and empirically investigate the effects bidding fees have on buyers' bidding behavior. Moreover, we analyze the impact of bidding fees on seller revenue and profit based on our empirical results.     

Strategic Bidding for Multiple Units in Simultaneous and Sequential Auctions

A buyer in an electronic marketplace may be interested in buying a bundle of items, where any one item in the bundle may not be of particular interest. The emergence of online auctions allow such users to obtain bundles by bidding on different simultaneous or sequentially run auctions. Because the number of auctions and the number of combinations to form the bundles may be large, the bundle bidding problem becomes intractable and the user is likely to make sub-optimal decision given time constraints and information overload. We believe that an automated agent that takes user preferences and budgetary constraints and can strategically bid on behalf of a user can significantly enhance user profit and satisfaction. Our first step to developing such an agent is to consider bundles containing many units of a single item to be bought from auctions that sell only multiple units of one item type. We assume that users obtain goods over several days. Expectations of auctions and their outcome in the future allow the agent to bid strategically on currently open auctions. We present an expected utility based strategy to decide how many items to bid for in the current auctions, and the maximum price to bid for each item. We evaluate our proposed strategy in different configurations by varying the number of items sold per auction, number of concurrently running auctions, expected closing prices, etc. We simulate several multiple unit English auctions per day, over multiple days, where most of the bidders bid their true utilities drawn from a distribution. The strategic bidding agent has knowledge of this distribution and uses it to determine its bids. A strategic agent who looks farther ahead into the future produces larger returns when there are few strategic bidders. We also evaluate the effect of risk attitudes on the relative performance of the bidders.     

A Transaction Utility Approach for Bidding in Second-Price Auctions

In both the Vickrey and eBay auctions, bidding the reservation price is the optimal strategy within the conventional utility framework. However, in practice, buyers tend to bid less than their reservation prices, and bid multiple times, thus increase their bids, in the course of an auction. In this paper, we show that both underbidding and multiple bidding behaviors can be consistent with utility maximization, if buyer's utility incorporates a transaction utility (reference price dependent) component. Transaction utility is based on the difference between the buyer's reference price and actual price paid; it captures the perceived value of the deal. More specifically, we show that the optimal bid is lower than the reservation price, but higher than the reference price. Furthermore, buyer may re-bid (above the prior optimal level) if the reference price is revised upon observing a higher current price.     

新消费者的消费行为研究与营销策略

把握和分析消费者的心理与行为是吸引消费者的制胜法宝。随着新经济时代的到来和消费者群体经济重要性的发展,我国消费者在心理与行为上发生了根本性的变化,呈现出一批新的消费者群体(简称"新消费者")。商家对新消费者资源的争夺使激烈的市场竞争日趋白热化。要想在竞争中立于不败之地,商家必须对他们加以重视,分析和研究他们的心理与行为,并据此采取有针对性的营销策略。     

Examining the Effect of Expressing a Quantitative Goal on Consumer Savings

We examine the effectiveness of implementation intention plans for achieving regular savings with small-scale, exploratory field research. A series of surveys required participants in a community-based savings campaign to form implementation intentions concerning timing, mode, amount, and source of income for savings during the next month. Baseline and two follow-up responses from treatment and control groups showed implementation plans that require individuals to express discretionary quantitative savings goals are less effective than those that require a generalized, nonquantitative commitment to save. This result has implications for savings programs, many of which consider an expressed quantitative goal to be crucial for success.     

Consumer Motivations to Participate in Event-Marketing Strategies

As part of the Adidas goes street-campaign, the Adidas Predator Cup was a fun-soccer tournament designed to "reconnect the youth in Germany with Adidas and the soccer sport by enjoying the pure fun, freedom and personal happiness of playing an informal soccer match with friends". Despite knowing that the Adidas Predator Cup was designed to communicate the same commercial messages they would have actively avoided otherwise, the young target audience participated in large numbers in this event-marketing strategy. The current study investigates why young consumers are motivated in such large numbers to experience the hyperreality of the Adidas soccer brand by feeling for an afternoon like being Ronaldinho, Beckham, Ballack or Keane. Using Wohlfeil and Whelan's conceptual model, four predispositional involvement dimensions are identified as motivational drivers and tested, before interesting results are discussed.     

How the Temporal Framing of Energy Savings Influences Consumer Product Evaluations and Choice

Consumer interest in behavior that is good for the environment is increasing, but actual behavior consistent with this objective has not risen accordingly. This may in part be due to consumers not realizing that their environmentally protective behaviors may have tangible future benefits for them. These studies examine the influence of message frames and a consumer's propensity to think about the future for products that have future benefits. More specifically, these studies examine how consumers respond to temporal frames of savings on product packaging for energy efficient products. Two studies suggest that the temporal framing of savings can influence product choice, purchase intentions, attitudes, and perceptions of savings. The results indicate that future‐oriented consumers are likely to have more positive evaluations when savings are framed in the distant future compared to the near future. In addition, there is a mediating effect of perception of savings. These experiments provide information of interest to marketers and researchers regarding the influence of temporal frames and a consumer's temporal orientation on products that have future benefits.     

消费需求目标风险与企业经营对策

从社会再生产看,只有消费需求才是经济增长真正和持久的拉动力量。投资需求在一定意义上是消费需求的派生需求。为了刺激消费需求,国家已经通过各项措施来努力启动消费、扩大内需。企业也通过开发新产品、降价、促销等措施来积极配合,并取得了一定的销售效果。在买方市场条件下     

Consumer Regulation Strategies: Attenuating the Effect of Consumer References in a Voting Context

Consumption cues (e.g., brands, money, and advertisements) can have powerful effects on cognition, perception, and behavior, yet how people regulate responses to such cues is not well understood. This is surprising given that consumption cues are increasingly present in nontraditional consumer contexts, such as healthcare, education, and politics. This research develops a measure of two types of consumer regulation strategies, cue‐based and budget‐based (studies 1–4), and demonstrates that these strategies influence how people respond to consumption cues in a political context (study 5). Specifically, in a study involving the 2012 American Presidential Election, priming survey participants as consumers (versus citizens) influenced both voting intentions and self‐reported voting behavior, and the newly developed consumer regulation scale was instrumental in detecting this effect. These findings suggest there may be merit in the escalating debate and concern over referring to voters as consumers.     

服务企业顾客忠诚的影响因素与培育策略研究

随着我国服务业的迅猛成长,国内服务企业之间的竞争日趋激烈,另外,加入WTO以后,国外服务企业巨头也纷纷进入我国市场与我国企业展开竞争,我国服务业市场的竞争必将愈演愈烈。服务企业之间的竞争归根到底是对顾客的争夺,赢得顾客忠诚将是企业在竞争中胜出的关键。本文将结合国内     

经济危机下的消费者行为和企业营销策略研究

本文探讨了在经济危机时期消费者行为较经济繁荣时期的变化 ,在此基础上指出企业应该根据消费者行为的变化进行相应的营销策略调整 ,并提出了具体的营销策略调整的思路。最后指出了本文获得的一些结论对于我国企业的三个重要启示。     

(Un)expected Bidder Behavior in Spectrum Auctions: About Inconsistent Bidding and Its Impact on Efficiency in the Combinatorial Clock Auction

The combinatorial clock auction is a two-stage auction format, which has been used to sell spectrum licenses worldwide in the recent years. It draws on a number of elegant ideas inspired by economic theory. A revealed preference activity rule should provide incentives to bid straightforward, i.e., consistent with the bidders’ valuations on a payoff-maximizing package, in each round of the clock phase. A second-price rule should set incentives to bid truthfully in both phases. If bidders respond to these incentives and bid straightforward in the clock phase and truthful in the second sealed-bid stage, then the auction is fully efficient. Unfortunately, bidders might neither bid straightforward in the clock phase nor truthful on all packages in the second sealed-bid stage due to strategic reasons or practical limitations. We introduce metrics based on Afriat’s Efficiency Index to analyze straightforward bidding and report on empirical data from the lab and from the field in the British 4G auction in 2013 and the Canadian 700 MHz auction in 2014, where the bids were made public. The data provides evidence that bidders deviate significantly from straightforward bidding in the clock phase, which can restrict the bids they can submit in the supplementary phase. We show that such restrictions can have a significant negative impact on efficiency and revenue.     

FreeMarkets and Online Auctions

Before last year's dot-com meltdown, one of the most hyped areas was large industry-based business-to-business (B2B) marketplaces. Most of these have either failed or are struggling. Instead, the growth today is in less ambitious online auctions where individual firms, increasingly having to focus on costs, seek suppliers of the products or services they need. FreeMarkets, growing fast though still unprofitable, is the leader in this growing field. This case discusses the problems and potential not only for FreeMarkets itself but also for the buying and selling companies which use it.     

Informative Brand Advertising and Pricing Strategies in Internet Markets with Heterogeneous Consumer Search

The use of information intermediaries has been shown to undermine the effect of brand in online markets. In this paper, the effect of consumer search on the relationship between brand advertising and pricing strategies is analysed. Price data are taken from the leading UK motor insurance comparison website, with the advantage that prices can be related to the search characteristics of consumers and to the advertising expenditure of firms. The paper finds that more-advertised firms have lower price rankings at the comparison site, indicating that advertising is informative in this market. The main result is that consumer search weakens the relationship between advertising and pricing. An implication is that increased usage of price comparison sites will make informative brand advertising less important.     

Anticounterfeiting Strategies and Their Influence on Attitudes of Different Counterfeit Consumer Types

This article reports the findings of two studies that were designed to determine the effectiveness of several anticounterfeiting strategies on the counterfeit purchasing behavior of the participants, through a mixed methods research approach. In Study 1, in‐depth interviews were conducted with 50 consumers of counterfeit brands in order to investigate their attitudes. Drawing on the results, which revealed four different consumer types (struggle, spurious, indifferent, and liberated), Study 2 was undertaken with a further 128 consumers (32 from each type) to further define each group's type and identify the best anticounterfeit strategies suited to each. The findings suggest that counterfeit purchasing may be reduced if a specific strategy is adapted to suit each typology. Overall, positive rather than negative strategies were found to be more effective for the struggle and spurious consumers compared with indifferent and liberated consumers. The findings also reveal that the acquisition of affordable genuine merchandise may be the key to preventing counterfeit purchasing.     

Consumer Self-Control Strategies: An Empirical Study of Their Structure and Determinants

People use self-control strategies to overcome time-inconsistent preferences. In the present study one aim was to test a two-factor model of consumer self-control strategies that divides them into desire-reducing and willpower strategies. Another aim was to explore what may determine the use of such strategies. Exploratory and confirmatory factor analyses gave support for the two-factor model of self-control. A positive attitude toward risk taking as well as the intention to reduce consumption in response to economic impairment predicted a decrease in the use of both strategies. Financial situation, age, and sex were found to influence the use of desire reduction and willpower in different directions. Income was not a predictor of the use of self-control strategies.     

Consumer Adaptation Strategies: From Austrian Shilling to the Euro

On 1st January 2002, in 12 countries of the European Union, euro notes and coins replaced existing national currencies. The currency changeover required citizens to adapt in various ways. They had to learn to handle new coins and notes, and evaluate prices in the new currency. Data on how these tasks were performed by Austrians are presented. In particular, Austrian consumers applied four different strategies to establish price intuition for the euro: a conversion strategy, an intuitive strategy, an anchor strategy, and a marker value strategy. Data on these strategies show that their application varies across socio-demographic characteristics, differs with purchase situations, relates to euro attitudes, and changes over time. Although the introduction of the euro took place about 5 years ago, the adaptation process is still ongoing.