Bidding Behaviour

We experimentally study procurement auctions when both quality and price matter. We compare two treatments where sellers compete on one dimension only (price or quality), with three treatments where sellers submit a price-quality bid and the winner is determined by a scoring rule that combines the two offers. We find that, in the scoring rule treatments, efficiency and buyer's utility are lower than predicted. Estimates from a Quantal Response Equilibrium model suggest that increasing the dimension of the strategy space imposes a complexity burden on sellers, so that a simpler mechanism like a quality-only auction may be preferable.

We run an experiment on procurement auctions in a setting where both quality and price matter. We compare two unidimensional treatments in which the buyer fixes one dimension (quality or price) and sellers compete on the other, with three bidimensional treatments (with different strategy spaces) in which sellers submit a price-quality bid and the winner is determined by a score that linearly combines the two offers. We find that, with respect to the theoretical predictions, the bidimensional treatments significantly underperform, both in terms of efficiency and buyer's utility. We attribute this result to the higher strategic complexity of these treatments and test this intuition by fitting a structural Quantal Response Equilibrium model with risk aversion to our experimental data. We find very similar estimates for the risk aversion parameter across all treatments; instead, the error parameter, which captures deviations between the observed bids and the payoff-maximizing ones, ...

Currently, multi-attribute auctions are becoming widespread awarding mechanisms for contracts in construction, and in these auctions, criteria other than price are taken into account for ranking bidder proposals. Therefore, being the lowest-price bidder is no longer a guarantee of being awarded, thus increasing the importance of measuring any bidder's performance when not only the first position (lowest price) matters. Modeling position performance allows a tender manager to calculate the probability curves related to the more likely positions to be occupied by any bidder who enters a competitive auction irrespective of the actual number of future participating bidders. This paper details a practical methodology based on simple statistical calculations for modeling the performance of a single bidder or a group of bidders, constituting a useful resource for analyzing one's own success while benchmarking potential bidding competitors.

Inclement weather is a major risk in construction project delay. Employers could transfer such weather risk to contractors by deleting the corresponding contractual provision for extension of time in the contract, but in return, the tender sums would be inflated to reflect the costs of this risk. Previous studies have provided very little guidance for employers to assess the costs involved in such risk transfer. Therefore, knowledge of contractors' pricing behaviour for weather risk becomes essential in the optimization of contract cost. This study aims at finding out contractors' behavioural pattern in pricing weather risk in tenders by investigating the relationships among their risk perceptions, attitudes and behaviours. With questionnaire data collected from different size groups of building contractors in Hong Kong, their behaviours are analyzed statistically. The results reveal that the risk-pricing behaviours of contractors of various sizes are different and smaller contractors are more willing to absorb weather risks in tenders. It is generally more cost efficient for employers to delete the contractual provision for extension of time due to inclement weather as contractors' allowance of weathercaused delays (in monetary terms) in tenders is less than the actual number of days of inclement weather obtained from weather records.

Nowadays, it is important for auction websites to obtain bidder loyalty. This study investigated the mediating effect of consumer perceptions between technological/brand stimuli and bidder loyalty to an online auction website by applying the traditional and evolutionary stimulus-organism-response models. We tested these models using 449 bidders from Taobao, an online auction service provider in China. Based on the results of covariance-based structural equation modelling, we showed that consumer perceptions fully mediate technological stimuli, but only partially mediate brand stimuli, and bidder loyalty. These results can be used to further improve the related research and practice.

Currently, multi-attribute auctions are becoming widespread awarding mechanisms for contracts in construction, and in these auctions, criteria other than price are taken into account for ranking bidder proposals. Therefore, being the lowest-price bidder is no longer a guarantee of being awarded, thus increasing the importance of measuring any bidder's performance when not only the first position (lowest price) matters. Modeling position performance allows a tender manager to calculate the probability curves related to the more likely positions to be occupied by any bidder who enters a competitive auction irrespective of the actual number of future participating bidders. This paper details a practical methodology based on simple statistical calculations for modeling the performance of a single bidder or a group of bidders, constituting a useful resource for analyzing one's own success while benchmarking potential bidding competitors.

Currently, multi-attribute auctions are becoming widespread awarding mechanisms for contracts in construction, and in these auctions, criteria other than price are taken into account for ranking bidder proposals. Therefore, being the lowest-price bidder is no longer a guarantee of being awarded, thus increasing the importance of measuring any bidder's performance when not only the first position (lowest price) matters. Modeling position performance allows a tender manager to calculate the probability curves related to the more likely positions to be occupied by any bidder who enters a competitive auction irrespective of the actual number of future participating bidders. This paper details a practical methodology based on simple statistical calculations for modeling the performance of a single bidder or a group of bidders, constituting a useful resource for analyzing one's own success while benchmarking potential bidding competitors.

Manufacturers and retailers are using online auctions to liquidate excess inventory. Using a field study of 11,879 online auctions, this paper builds upon theories of competitive processes to relate four key seller-controlled variables (starting price, day of close, auction length, and brand) to outcomes of online auction for apparel goods. Results suggest that to obtain a higher percentage of the original retail price, retailers should start with a lower price and feature national brands. These and other findings are discussed and a number of future research topics are offered.

Electricity market liberalisation has become common practice internationally. The justification for this process has been to enhance competition in a market traditionally characterised by statutory monopolies in an attempt to reduce costs to end-users. This paper endeavours to see whether a pool market achieves this goal of increasing competition and reducing electricity prices. Here the electricity market is set up as a sealed bid second price auction. Theory predicts that such markets should result with firms bidding their marginal cost, thereby resulting in an efficient outcome and lower costs to consumers. The Irish electricity system with a gross pool market experiences among the highest electricity prices in Europe. Thus, we analyse the Irish pool system econometrically in order to test if the high electricity prices seen there are due to participants bidding outside of market rules or out of line with theory. Results indicate that the Irish pool system appears to be working efficiently and that generators are bidding their true marginal costs. Thus, the pool element of the market structure does not explain the high electricity prices experienced in Ireland.

Manufacturers and retailers are using online auctions to liquidate excess inventory. Using a field study of 11,879 online auctions, this paper builds upon theories of competitive processes to relate four key seller-controlled variables (starting price, day of close, auction length, and brand) to outcomes of online auction for apparel goods. Results suggest that to obtain a higher percentage of the original retail price, retailers should start with a lower price and feature national brands. These and other findings are discussed and a number of future research topics are offered.

This paper provides emic and etic interpretations of engagement with a consumer-to-consumer (C2C) online auction site, based on in-depth interviews with buyers. The study exposes three misconceptions about online C2C auctions; that the interaction between parties occurs exclusively online, that the relation between buyers and sellers is purely transactional in nature, and that the interaction between buyers and sellers does not lead to ongoing business relationships. The paper reveals the utilitarian, hedonic and social benefits that are the bases of engagement with the auction site. Social benefits materialize for auction buyers during offline exchanges. The paper also reveals marketer incentives and structural disincentives for consumers' ongoing use of the auction site.

Ranking algorithms of e-commerce sites take the buyer's search query and information of the corresponding sellers' items as input, and output a ranking of sellers' items that maximizes sites' objectives. However, the conversion rate of each item (i.e., the probability of a completed transaction) not only depends on the ranking given by the site (which controls click-through rates), but also depends on the item price set by its seller(which controls the buyer's willingness to buy). As a result, a ranking algorithm is in fact a mechanism that deals with sellers who strategically set item prices. An interesting fact about this setting, at least the status quo for the largest e-commerce sites such as Taobao, Amazon, and eBay, is that sellers are usually not given the option to report their private costs but can only communicate with the site by setting item prices. In terms of mechanism design, this is a setting where the designer is restricted to design a specific t...

Currently, multi-attribute auctions are becoming widespread awarding mechanisms for contracts in construction, and in these auctions, criteria other than price are taken into account for ranking bidder proposals. Therefore, being the lowest-price bidder is no longer a guarantee of being awarded, thus increasing the importance of measuring any bidder's performance when not only the first position (lowest price) matters. Modeling position performance allows a tender manager to calculate the probability curves related to the more likely positions to be occupied by any bidder who enters a competitive auction irrespective of the actual number of future participating bidders. This paper details a practical methodology based on simple statistical calculations for modeling the performance of a single bidder or a group of bidders, constituting a useful resource for analyzing one's own success while benchmarking potential bidding competitors.

This study compares online bidders and non-bidders based on their demographic and psychographic characteristics. An online survey was developed to collect data using Zoomerang's online consumer panel. Findings show that online bidders have a lower level of risk aversion and a higher level of need for uniqueness and propensity to trust than nonbidders. Online bidders are also more likely to engage in variety-seeking and impulsive-buying behavior than non-bidders. Results indicate that online bidders are younger, more educated, and have a higher income level than non-bidders. This study also finds that gender and prior online shopping experience moderate the differences between online bidders and nonbidders. Theoretical and managerial implications are discussed.

We run an experiment on procurement auctions in a setting where both quality and price matter. We compare two unidimensional treatments in which the buyer fixes one dimension (quality or price) and sellers compete on the other, with three bidimensional treatments (with different strategy spaces) in which sellers submit a price-quality bid and
the winner is determined by a score that linearly combines the two offers. We find that, with respect to the theoretical predictions, the bidimensional treatments significantly underperform, both in terms of efficiency and buyer's utility. We attribute this result to the higher strategic complexity of these treatments and test this intuition by fitting a structural Quantal Response Equilibrium model with risk aversion to our experimental data. We find very similar estimates for the risk aversion parameter across all treatments; instead, the error parameter, which captures deviations between the observed bids and the payoff-maximizing ones, is larger in the bidimensional treatments than in the unidimensional ones. Our evidence suggests that increasing the dimensionality and the size of the suppliers' strategy space increases their tendency to make suboptimal offers, thus undermining the theoretical superiority of more complex mechanisms.

Despite the popularity among millions of users around the globe of selling, bidding for, and buying products using online auction websites, the existing literature provides little understanding of what causes users to choose one auction site over another. One way to examine this is to explore users' satisfaction with auction websites. The current study extends past literature on user computing satisfaction to evaluate bidder satisfaction from the usage of online auction websites. A greater understanding of bidder satisfaction can facilitate the design of a customer-friendly user interface, thus increasing the effectiveness of auction websites and furthering the success of e-commerce applications and businesses.

This paper examines the effects of different factors on the success or failure of bids for infrastructure projects in Australia. Logistic regression analysis was used to empirically determine which factors have the largest effect on bidding success. Data was collected from 123 bids submitted by several infrastructure companies with subsidiaries in Australia. The analysis found that having a competitive advantage and a local partner, and also not competing against a local company were the most important factors; as they significantly increase the chances of success. However, four  other factors, having relevant expertise, resource availability, a previous relationship with the client, and a previous relationship with consortium members, are ‘essential’ to be able to compete; as the absence of any of these four factors results in bid failure, although having them is not a guarantee of success. Results of this paper provide valuable information for any company considering the opportunity of entering into Australia’s infrastructure market as well as for companies that are already present in that country and are considering whether to bid for a specific project.

This research article explores the content of consumers 0 experience when they shop online and proposes a first step in conceptualizing the 'online shopping experience 0 (OSE). First, we carried out an extended literature review and proposed an integrative conceptual framework. Then, we relied on a consumers discourse analysis with four focus groups with consumers who differ in terms of age, gender and online shopping experience.

Nowadays, it is important for auction websites to obtain bidder loyalty. This study investigated the mediating effect of consumer perceptions between technological/brand stimuli and bidder loyalty to an online auction website by applying the traditional and evolutionary stimulus-organism-response models. We tested these models using 449 bidders from Taobao, an online auction service provider in China. Based on the results of covariance-based structural equation modelling, we showed that consumer perceptions fully mediate technological stimuli, but only partially mediate brand stimuli, and bidder loyalty. These results can be used to further improve the related research and practice.

This article examines how price cues can be used strategically to influence consumers' perceptions and bid judgments in Name-Your-Own-Price (NYOP) auctions. It focuses on three specific types of price cues: a low and plausible price cue, a high but implausible price cue, and a range price cue that is bounded at the upper end by the high price cue and at the lower end by the low price cue. A controlled experiment indicates that consumers perceive the range and low price cue as more useful in aiding their bidding decisions than the high price cue. The range and low price cue positively impact bidders" confidence in winning while the high price cue reduces their confidence level. Interestingly, consumers" value and bid judgments" can be influenced by the high price cue even though they view it with skepticism. The low end of a range price cue is found to have a greater impact on consumers" perceptions and bid judgments than the high end, possibly because a range...

Manufacturers and retailers are using online auctions to liquidate excess inventory. Using a field study of 11,879 online auctions, this paper builds upon theories of competitive processes to relate four key seller-controlled variables (starting price, day of close, auction length, and brand) to outcomes of online auction for apparel goods. Results suggest that to obtain a higher percentage of the

The phenomenal growth of e-commerce and online auctions is exceeded only by the corresponding growth in e-commerce and online auction fraud. Herein, we report two pilot studies that use eBay data, and the Bell & Whaley (1991) taxonomy of cheating, to investigate the nature and frequency of online auction deception. Study one (n = 24) categorizes a one-week sample of online transactions into deception strategies in two general classes (i.e., hiding versus showing) and three strategic domains (i.e., product, seller, and transaction characteristics).

Businesses can choose who they want to be online. Product and company attributes that are directly perceivable in the real world can be manipulated to make a favorable impres-sion on online buyers. This study examines whether creating a more professional online e-image ...

Businesses can choose who they want to be online. Product and company attributes that are directly perceivable in the real world can be manipulated to make a favorable impres-sion on online buyers. This study examines whether creating a more professional online e-image ...

The present research sheds new light on the antecedents and outcomes of bidders' perceived risk. It examines the role of the two-system model in the context of activating the potential to either win or lose an online auction. This study demonstrates that when a bidder's affective system is primed, concern about losing the item is greater and ultimately the bid amount is higher when the bidder expects to lose rather than win. Conversely, when the cognitive system is primed, the anticipated goals of winning the auctionrather than the fear of losingdrive the bidder's actions. In the latter case, the bidder pays a higher amount if the expectancy of winning is primed, as opposed to the expectancy of losing. A field study on eBay and two lab studies confirm this phenomenon.

Extant literature in decision theory suggests that online auction buyers depend on signals for mitigating uncertainty that influence bidder behavior at multiple points. However, the depth and breadth of the use of signals has only been partially explored. Using data from 242 online auction users, we show that eight emergent factors influence decisions of auction selection and initial bid in different ways. We further find that two ethical perspectives impact the evaluation of seller uncertainty in unique ways, although neither perspective predominates within our sample. These results enable sellers and online auction marketplaces to better design and implement auction systems that provide signals that buyers most desire.

Currently, multi-attribute auctions are becoming widespread awarding mechanisms for contracts in construction, and in these auctions, criteria other than price are taken into account for ranking bidder proposals. Therefore, being the lowest-price bidder is no longer a guarantee of being awarded, thus increasing the importance of measuring any bidder’s performance when not only the first position (lowest price) matters.
Modeling position performance allows a tender manager to calculate the probability curves related to the more likely positions to be occupied by any bidder who enters a competitive auction irrespective of the actual number of future participating bidders.
This paper details a practical methodology based on simple statistical calculations for modeling the performance of a single bidder or a group of bidders, constituting a useful resource for analyzing one’s own success while benchmarking potential bidding competitors.

As a key element in the vast majority of marketing exchanges, pricing has been studied from numerous perspectives and in a number of contexts. The psychology of pricing constitutes an expansive subset of pricing research wherein prices and pricing are examined with respect to their human elements -that is, with respect to how humans attend to, perceive, process, and evaluate price information, as well as how they go about determining the price at which a particular item should be sold or purchased. Although the marketing and psychology literatures are replete with examinations of pricing in a traditional context, the growth of the Internet has added new dimensions to how prices are set and perceived. In addition, it has allowed for larger and richer data sets by which pricing can be investigated. Finally, it has expanded the role of buyers in price setting and has made more transparent the price-setting practices of sellers. Altogether, the current situation has created a renewed need to study the psychology of pricing as it applies not only to general business exchanges, but specifically toward the Internet and e-commerce. To facilitate a better understanding of Internet pricing research and the articles contained in this Special Issue, it is useful to present a brief discussion of potential research areas pertaining to the psychology of pricing and how they relate to the Internet as an exchange medium.

As a key element in the vast majority of marketing exchanges, pricing has been studied from numerous perspectives and in a number of contexts. The psychology of pricing constitutes an expansive subset of pricing research wherein prices and pricing are examined with respect to their human elements -that is, with respect to how humans attend to, perceive, process, and evaluate price information, as well as how they go about determining the price at which a particular item should be sold or purchased. Although the marketing and psychology literatures are replete with examinations of pricing in a traditional context, the growth of the Internet has added new dimensions to how prices are set and perceived. In addition, it has allowed for larger and richer data sets by which pricing can be investigated. Finally, it has expanded the role of buyers in price setting and has made more transparent the price-setting practices of sellers. Altogether, the current situation has created a renewed need to study the psychology of pricing as it applies not only to general business exchanges, but specifically toward the Internet and e-commerce. To facilitate a better understanding of Internet pricing research and the articles contained in this Special Issue, it is useful to present a brief discussion of potential research areas pertaining to the psychology of pricing and how they relate to the Internet as an exchange medium.

This paper presents findings from an interpretive study concerning the social processes involved in the act of bidding on the internet auction site eBay.com. Interpretations of depth interviews provide insights to the dynamic social forum of internet auction sites and their dissimilarity from both traditional retail venues and online stores. Participants' stories suggest how competing and a desire to maintain community norms can create conflict in the form of a struggle for control. Following a grounded theory tradition, emergent themes are integrated with relevant research that involves behavioural, emotional and social structural components. This study contributes to our understanding of unique social psychological aspects of online consumer behaviour. We also discuss implications for marketers and researchers. He has published six book chapters, regularly presents at global conferences and regularly reviews manuscripts for at least a dozen journals. His expertise is in customer value management, consulting with numerous firms on brand/product management, account management, deep customer insight processes and supply chain innovation.

Following a brief critique of the positivlst orientation and method, this paper presents an alternative perspectiv (symbolic interactionism) and research approach (participant observation). The conclusion focuses on som issues of interest to consiimer researchers which are most effectively investigated using this alternative orientation and methodology.

This paper examines the behavioral aspects of bidder conduct in on-line auctions. It utilizes price data from 113 on-line auctions, surveys of winning bidders, and draws upon the consumer behavior and auctions' literature to examine individual trait differences in shopping preferences that predict a buyer's decision to use "strategic exit," the fi xed-price Buy-It-Now (BIN) functionality. It argues that impulse-buying tendencies, trait competitiveness, and hedonic need fulfi llment are antecedents of strategic exit, and that hedonic need fulfi llment moderates the effect of impulse-buying tendencies on strategic exit. Buyers who exit an auction early by using the BIN feature end up paying a higher than average price. Theoretical and practical implications for the design of electronic auctions and the process of selling goods are offered.