Auction fever is a multifaceted phenomenon that is frequently observed in both traditional and Internet auctions. In order to gain a better understanding of its causes, we develop a conceptual framework to analyze emotions in auctions, which is based on an exhaustive literature review. The framework integrates rational calculus with emotional aspects and suggests that emotional processing is triggered at three different stages of an auction: First, the economic environment can affect a bidder’s level of perceived competition and thus influence the bidding strategy prior to the auction. Second, auction events may have ramifications on the bidder’s emotional state during the auction due to previous investments or perceived ownership. Third, past auction outcomes may impact future bidding behavior through emotions such as the joy of winning or loser regret. Auction fever, eventually, is a phenomenon that results from the interplay of these emotional processes and causes a bidder to deviate from an initially chosen bidding strategy.
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We thank an anonymous referee for pointing this out.
To the best of our knowledge there are no studies to date that have systematically investigated the hypothesized direct relationship between auction events and immediate emotions (P3). In the conclusion, we argue that this should be subject to future neuro- or physioeconomic studies.
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Adam, M.T.P., Krämer, J., Jähnig, C. et al. Understanding auction fever: a framework for emotional bidding. Electron Markets 21, 197 (2011). https://doi.org/10.1007/s12525-011-0068-9
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