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ABSTRACT
The outcome of any auction sale is dependent upon a variety of interbehavior dynamics, which are either intensified or diminished according to the number of bidders involved. Two live auctions were studied and significant relationships were found between the number of bidders and bid range, starting bid values, and winning bids. The least competitive bidding occurred with three bidders. When there were four or more bidders, winning bids were likely to exceed starting bids. Strategies for participating in live auctions are discussed. (c) 2003 Wiley Periodicals, Inc.
Auctions have recently become popularized with the Internet and, especially, the success of eBay. Many researchers have jumped on this as an area of study to investigate the dynamics of bidding and offerings (Ariely, Roth, &Ockenfels, 2002; Ariely &Simonson, 2002; Dholakia & Stoltysinski, 2001; Dholakia, Basuroy, &Stoltysinski, in press). However, auctions have been around for centuries before the Internet, but they were mainly studied by economists and usually in industrial markets (e.g., Brannman, Klein, &Weiss, 1987; Dyer, Kagel, &Levin, 1989).
Very little information on live auctions exists in the marketing and psychology literature. It would seem that live auctions might have some relevance to the understanding of on-line auctions and, in addition, might be a very interesting area of study for consumer behavior. The atmosphere of a live auction sale is .lled with energy, excitement, and anticipation, and auctioneers use this to their full advantage. The presence of large numbers of people in a consumer environment increases arousal levels, creating a more intense subjective experience for the consumers (Stokols, 1972). The thought of competition also increases arousal in consumers and may lead to bidders being swept up in a bidding war they never intended. In fact, many art dealers, who purchase paintings through auctions, actually send an agent to buy for them due to the emotional involvement and competitive nature of the sale (Kuiper, 1996).
Competition is regarded as being an extremely important variable in determining bidding behavior. Therefore it would be highly bene.cial for both auctioneers and bidders to see how the number of bidders affects other bidding variables such as changes in the bid range, the number of bids placed, bid increments, bidding strategy, and the values of both the average and winning bid....