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Active bidders versus smart bidders: Do participation intensity and shopping goals affect the winner’s joy in online bidding?

Kacy K. Kim (Marketing Department, Bryant University, Smithfield, Rhode Island, USA)
Michael J. Gravier (Marketing Department, Bryant University, Smithfield, Rhode Island, USA)
Sukki Yoon (Marketing Department, Bryant University, Smithfield, Rhode Island, USA)
Sangdo Oh (Yonsei University – Wonju Campus, Wonju, Gangwon-do, Republic of Korea)

European Journal of Marketing

ISSN: 0309-0566

Article publication date: 20 February 2019

Issue publication date: 30 April 2019

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Abstract

Purpose

The purpose of this paper is to contrast two lay theories of how consumers draw affective inferences about their online bidding experiences. The active-bidder theory (smart-bidder theory) predicts that after winning a bid, highly (minimally) participative bidders would be more satisfied than minimally (highly) participative bidders.

Design/methodology/approach

Four experiments test two competing hypotheses, the active-bidder hypothesis and the smart-bidder hypothesis (Study 1), identify a condition that mitigates the observed effects (Study 2), identify when the mitigation is effective or ineffective (Study 3) and replicate the findings in a scenario-based study where participants are allowed to make actual bidding decisions (Studies 4A and 4B).

Findings

The findings support the smart-bidder hypothesis across three different product categories; however, this heuristic-driven effect is absent when bidders have concrete shopping goals. The effect was sufficiently robust to be observed even when the bids are made at will.

Research limitations/implications

The present research does not incorporate the widely adopted procedure of second-price auction (also known as proxy bidding in the eBay setting), a system that allows the highest bidder to win the auction but pay the amount of the second-highest bid.

Practical implications

Online consumers should be mindful that entering the minimum number of bids not only helps consumers avoid overbidding but also elevates their joy in winning after the auction ends.

Originality/value

Prior research on bidding behavior on online auction sites has yet to examine how different bidding dynamics affect consumers’ post-auction satisfaction. This research sheds light on the psychological process underlying the robust phenomenon: online auction consumers rely heavily on proxy signals. Bidders appear to use the efficiency heuristic in constructing their affective judgments of their buying experiences.

Keywords

Citation

Kim, K.K., Gravier, M.J., Yoon, S. and Oh, S. (2019), "Active bidders versus smart bidders: Do participation intensity and shopping goals affect the winner’s joy in online bidding?", European Journal of Marketing, Vol. 53 No. 4, pp. 585-606. https://doi.org/10.1108/EJM-09-2016-0492

Publisher

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Emerald Publishing Limited

Copyright © 2019, Emerald Publishing Limited