Contrast effects in online auctions

Jesse C. Bockstedt, Kim Huat Goh, Sharon Ng

Research output: Contribution to journalArticle

Abstract

Prior research has shown online auction features can serve as information cues and affect consumers' willingness-to-pay. We argue that auctions are not only affected by their information cues but also by contrasting, peripheral information cues from adjacent auction listings. Applying contrast effects theory, we examined the moderating effects of time urgency and persuasion intent on the processing of contrasting peripheral information from adjacent auctions. Using two controlled experiments and an empirical field study, we showed that time urgency experienced by bidders in online auctions resulted in increased heuristic processing of contrasting information from adjacent auction listings. Under time pressure, bidders were more likely to be affected by this contrasting peripheral information. We 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 and underscore the importance of peripheral information from adjacent auctions in impacting auction outcomes.

Original languageEnglish (US)
Pages (from-to)139-151
Number of pages13
JournalElectronic Commerce Research and Applications
Volume12
Issue number3
DOIs
StatePublished - May 1 2013

Keywords

  • Behavioral economics
  • Consumer decision-making
  • Contrast effects
  • Electronic commerce
  • Experiment
  • Heuristics
  • Online auctions
  • Willingness-to-pay

ASJC Scopus subject areas

  • Computer Science Applications
  • Computer Networks and Communications
  • Marketing
  • Management of Technology and Innovation

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