Arousal, interest, and auctions
Running head: Arousal, interest, and auctions
Arousal, interest, and auctions
Gillian Ku
London Business School
Adam D. Galinsky
J. Keith Murnighan
Northwestern University
1
Arousal, interest, and auctions
2
Abstract
Auctions, which have become increasingly important engines of contemporary economic
activity, are social contexts that can generate and be influenced by arousal. We investigated the
effects of arousal on auction behavior by manipulating arousal in three ways: changing two
essential elements of auctions (stakes and time pressure), asking participants to recall a
competition in which they felt aroused or calm, and creating cognitive dissonance. The results of
all three experiments document that arousal results in more bidding. They also provide a more
complete picture of arousal‟s effects by showing that interest mediated the effects of arousal on
bidding. The discussion explores how arousal can not only be misattributed as romantic interest
but also as interest in auctions, and discusses the broader implications of the role of arousal in
competitions and conflicts.
Key words: arousal, interest, auctions, emotions, competition, time pressure
Arousal, interest, and auctions
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Arousal, interest, and auctions
“When the competition swings into high gear, e-motion really comes into play, …
In the beginning, you might feel it as an affront, almost offensive, when someone
else bids on something you want … But you decide you won’t back down. Come
Hell or high water, you’re going to stand triumphant.” (Prince, 1999, p. 171-172)
Anecdotal accounts, including the above quote, point to the critical role of arousal in
auctions: bidding in an auction often comes with a rush of adrenaline. Stories about seemingly
desperate bidders going well beyond original estimates in a frenzied attempt to win, about houses
that sell for hundreds of thousands of dollars over their asking prices, and about cunning
auctioneers who wield emotional power over hapless, easily manipulated bidders, have all
contributed to an accumulation of folklore on „auction fever‟. Surprisingly, however, research
has only recently begun to address the influence of arousal on people‟s bidding behavior in
auctions (Ku, Malhotra, & Murnighan, 2005). The current research uses multiple manipulations
of arousal to further explore the effects of arousal on auction bidding, finding that arousal can
increase interest in an auction item, which then increases bidding.
Arousal
Emotions are often classified according to their valence (e.g., happy vs. sad) and their
arousal levels (e.g., arousal vs. calm, Russell, 1980), with the past 25 years of research on moods
and emotions primarily focusing on the effects of valence on decision-making processes and
outcomes (e.g., Forgas, 1989; Isen & Means, 1983; Mellers, Schwartz, & Cooke, 1998; Schwarz,
2000). Recent research has shown that the effects of emotions go beyond mere valence, with
similarly-valenced emotions, e.g., anger vs. sadness vs. fear, having markedly different effects
because they differ in their appraisal tendencies (e.g., DeSteno, Petty, Wegener, & Rucker, 2000;
Lerner & Keltner, 2000, 2001; Smith & Ellsworth, 1985). For example, in contrast to feelings of
Arousal, interest, and auctions
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fear, anger and happiness lead to optimistic risk assessments because happiness and anger both
produce appraisal tendencies marked by certainty (Lerner & Keltner, 2001).
Despite an important array of findings on emotions, valence, and appraisal tendencies,
recent empirical research has tended to ignore the elemental effects of arousal. However, arousal
itself has been shown to have systematic effects on decision making: arousal can hinder effective
decision making by restricting attentional capacity (Mano, 1992), as well as decreasing message
elaboration (Lewinsohn & Mano, 1993; Mano, 1997) and attention to product-describing
information (Lewinsohn & Mano, 1993). Arousal also increases the use of simple decision rules
(Mano, 1992), risk-taking (Mano, 1992, 1994), extreme judgments (Mano, 1992), purchase
intentions (Mano, 1999), and a reliance on previously-considered information (Lewinsohn &
Mano, 1993).
Additionally, arousal can affect decision making via attributions as people search for
plausible causes to help them interpret their feelings. Thus, arousal is labile, taking its meaning
from aspects of the situation. Schachter and Singer‟s (1962) classic research, for instance,
demonstrated that people can interpret an unexpected rush of drug-induced adrenalin positively
or negatively, depending on the context. As a result, people often make attributional mistakes by
connecting their arousal to non-causal stimuli (Dutton & Aron, 1974; Schachter & Singer, 1962;
White, Fishbein, & Rutstein, 1981; Zillmann, 1983; Zillmann & Bryant, 1974). Dutton and Aron
(1974), for example, found that male participants interpreted the fear that they experienced from
crossing a shaky suspension bridge as sexual interest when they were interviewed by an
attractive female as they stood on the shaky bridge. Similarly, the arousal from awaiting electric
shocks, exercising, or hearing violent stories increases sexual interest towards attractive others
(White et al., 1981). The current research investigates whether this same misattribution process
Arousal, interest, and auctions
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can occur for non-romantic targets; that is, whether arousal can increase interest and subsequent
bidding for an auction item.
Arousal in Auction Bidding
The use of auctions as a market mechanism has exploded in recent years (Ku & Malhotra,
2001; Lucking-Reiley, 2000), with examples including Internet auctions, property bidding wars,
complex business-to-business online auctions, mergers and acquisitions, governmental auctions
for radio spectrums, and the stock market. Research on auctions has historically been the
province of economists who have focused on the efficiency of auction institutions (e.g., rules and
procedures) and the dynamic forces of collusion, learning, and uncertainty (see Kagel, 1995;
McAfee & McMillan, 1987 for overviews), with a particular emphasis on bidder rationality.
Little research, however, has addressed the emotional reactions that accompany auction bidding.
Bidding in auctions, however, even Internet auctions (as suggested by the opening quote), can
create palpable feelings of arousal that are popularly labeled „auction fever‟.
Ku et al.‟s (2005) analyses of a series of live and Internet auctions led them to develop a
competitive arousal model of emotionally-charged decision making to explain auction fever.
Their model proposed that some of the basic features of an auction – rivalry, time pressure, the
presence of an audience, and being in the spotlight – would boost arousal and increase
overbidding. For example, the presence of a live audience in their study resulted in bidders
exceeding their own pre-set limits considerably more than Internet bidders did, consistent with
the arousing properties of audiences (Cottrell, Wack, Sekerak, & Rittle, 1968; Zajonc, 1965). Ku
et al. (2005) also presented additional evidence implicating arousal, finding that rivalry – the
competitive motivations experienced in head-to-head battles – increased overbidding as well as
feelings of excitement and anxiety.
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Because Ku et al.‟s (2005) studies did not separate the arousal and valence dimensions of
emotions (Russell, 1980), their findings provide only suggestive evidence for the impact of
arousal. Thus, the current studies examine the effects of arousal on auction behavior more
directly and also investigate the potential for misattributions of arousal in auctions.
The Current Research
Experiment 1 tested predictions from the competitive arousal model (Ku et al., 2005) by
manipulating two central, structural elements of an auction. Experiments 2 and 3 tested whether
arousal can be (mis)attributed as interest in an auction item, which then translates into increased
bidding. Experiment 2 used a recall task to prime arousal in a competitive setting; Experiment 3
tested whether a third manipulation of arousal that is unrelated to competition – freely choosing
to write a counterattitudinal essay – can also increase interest and bidding.
Theoretically, this research enriches our understanding of arousal in auction bidding by
assessing the importance of interest as a mediator. In addition, this research broadens our
understanding of the dynamics of arousal: although most studies examining the arousal 
interest link have been confined to sexual interest, we suggest that arousal can also be attributed
to interest more generally, in this case, to an auction item. Finally, by using multiple
manipulations, our experiments demonstrate the robust effects of arousal on auction behavior.
Experiment 1
Experiment 1 investigated the impact of arousal on bidding by manipulating two
structural elements inherent to auctions – stakes and time pressure. Stakes, or the value of a
prize, should increase both individuals‟ competitive motivations (e.g., Knox & Douglas, 1971;
Komorita, Chan, & Parks, 1993; Shepperd, 1995) and their arousal. Time pressure has been
shown to fuel arousal (Cates et al., 1996; Maule, Hockey, & Bdzola, 2000) and, as a central
Arousal, interest, and auctions
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element (along with rivalry) in the competitive arousal model, should lead to overbidding (Ku et
al., 2005). Thus, stakes, time pressure, and their combination should lead to increased arousal
and more bidding.
Method
Participants
Participants were 71 undergraduates (31 men, 40 women) who were compensated $10.
Five participants were excluded from the analyses because they were suspicious that this was not
a real competition, had done the task before, or ran out of time in the auction (i.e., they might
have bid higher). This resulted in a final N of 66 undergraduates (27 men, 39 women). Although
participants were told that they would receive a performance-based bonus, they all received an
additional $2. The experiment used a 2 (stakes: low vs. high) x 2 (time pressure: low vs. high)
between-participants design.
Procedure
The auction. Participants were told that they would bid against another person in an
auction for a prize of points that would be converted into cash, with higher bidders winning the
prize and paying what they bid and lower bidders paying what they bid but winning nothing (see
Ku, 2008, in press; Shubik, 1971). In reality, participants bid against a programmed opponent.
Participants‟ goals were to win but also to pay as little as possible because unused points would
be converted into cash. Bidding began at 40 points and proceeded in 40-point increments, with
no jump bidding allowed. To ensure participants understood the auctions, they saw a mock
auction, with pop-up balloons highlighting key auction features. They then viewed the mock
auction in “real time.”
Arousal, interest, and auctions
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Next, participants received information about their auction: the prize was 356 points,
participants started with 800 points, and they had to make the first bid. The auction ended when
the computer/confederate bid 800 points, participants ran out of time, or they stopped bidding.
Participants always lost and were informed that they would have to pay their last bid.
Stakes. Stakes were manipulated by altering the value of the points: the 356-point prize
was worth either $0.89 (low stakes) or $8.90 (high stakes). Unused points were converted into
cash at the same rates (four points for $0.01 or $0.10).
Time pressure. A countdown clock showed participants that they had either ten (low time
pressure) or four (high time pressure) seconds to make their bids. To further heighten the sense
of time pressure in the high time pressure condition, the words “Going, going, gone!” appeared
under the countdown numbers.
Dependent variables. Participants‟ bids were recorded. After the auction, they completed
Mano‟s (1991) index of arousal, rating how aroused, astonished, and surprised they were on 11point scales from “not at all” to “very much” (Cronbach‟s  = .69). They also completed
manipulation check items on how hard they tried to win and how rushed they felt.
Results and Discussion
Manipulation Checks
High stakes participants (M = 4.90, SD = 1.72) reported trying harder to win the prize
than low stakes participants (M = 3.97, SD = 1.90; F(1, 62) = 4.60, p < .04, 2p = 0.069). High
time pressure participants (M = 4.88, SD = 1.72) also reported trying harder to win the prize than
low time pressure participants (M = 3.97, SD = 1.92; F(1, 62) = 4.42, p = .04, 2p = .067). The
stakes x time pressure interaction was not significant (F < 1, p = .50).
Arousal, interest, and auctions
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High time pressure participants reported feeling significantly more rushed (M = 4.59, SD
= 1.74) than low time pressure participants (M = 3.41, SD = 1.62; F(1, 62) = 7.96, p = .006, 2p
= .11). Neither the stakes main effect nor the interaction was significant (Fs < 1, ps > .51).
Bidding and Arousal
We predicted that individuals should bid the most when stakes and time pressure were
high, with arousal being the proximal cause. A 2 (stakes) x 2 (time pressure) analysis of variance
(ANOVA) of participants‟ bids yielded a significant main effect for stakes (F(1, 62) = 5.47, p =
.02, η2p = .08): high stakes led to significantly higher bids (M = 548, SD = 248) than low stakes
(M = 406, SD = 255), with the former (but not the latter) resulting in participants paying more
than the 356-point prize was worth (t(30) = 4.31, p < .001, d = 1.09 and t(34) = 1.15, p = .26, d =
.28 respectively). Time pressure, however, did not significantly affect participants‟ bids (F(1, 62)
= .30, p = .58, η2p = .005). Finally, although the interaction was not significant (F(1, 62) = 1.94,
p = .17, η2p = .03), a more specific contrast (Rosnow & Rosenthal, 1995) showed that high
stakes and high time pressure led to significantly higher bids than the other three conditions
(t(62) = 2.40, p = .02, d = .74, see Table 1). The combination of high stakes and high time
pressure also produced bidding that clearly exceeded the value of the prize, (t(14) = 4.87, p =
.001, d = 1.64), as compared to the marginally or non-significant results of the other three
conditions (high stakes and low time pressure: t(15) = 2.02, p = .06, d = .71; low stakes and low
time pressure: t(17) = 1.15, p = .27, d = .38; low stakes and high time pressure: t(16) = .40, p =
.69, d = .14).
A 2 (stakes) x 2 (time pressure) ANOVA on participants‟ reported arousal yielded two
main effects, with high stakes (M = 4.42, SD = 1.77) generating more arousal than low stakes (M
= 3.45, SD = 2.16; F(1, 62) = 4.12, p < .05, η2p = .06) and high time pressure (M = 4.38, SD =
Arousal, interest, and auctions
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2.18) generating marginally more arousal than low time pressure (M = 3.47, SD = 1.81; F(1, 62)
= 3.71, p < .06, η2p = .06). Although the interaction was not significant (F(1, 62) = .24, p = .63,
η2p = .004), the critical contrast (Rosnow & Rosenthal, 1995) showed that the combination of
high stakes and high time pressure resulted in significantly more arousal than the other three
conditions (t(62) = 2.50, p < .02, d = .74, see Table 1).
Finally, arousal partially mediated the effects of stakes on participants‟ bids (R2 increase
= .16, F(1, 63) = 13.58, p < .001; Sobel Z = 1.75, p = .08) and fully mediated the high stakeshigh time pressure effect on participants‟ bids (R2 increase = .15, F(1, 63) = 12.56, p = .001;
Sobel Z = 2.06, p < .05).
High stakes led to significantly more bids than low stakes and, although time pressure did
not directly affect bidding, the combination of high stakes and high time pressure resulted in
considerable arousal, more bidding, and clear overpayment. Experiment 1 also provided support
for the competitive arousal model (Ku et al., 2005) by documenting the mediating role of arousal
in bidding behavior.
Experiment 2
Experiment 1 showed that high stakes and high time pressure resulted in the most
arousal, which then increased bidding. In the next experiment, we explore whether arousal
affects bidding through increased interest. As noted, arousal takes on psychological meaning via
attributions (Schachter & Singer, 1962; Zillmann, 1983; Zillmann & Bryant, 1974). For example,
generalized arousal – from awaiting electric shocks, crossing shaky bridges, exercising, or
hearing violent stories – increases sexual interest towards attractive others encountered shortly
after the arousal was created (Dutton & Aron, 1974; White et al., 1981).
Arousal, interest, and auctions
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Experiment 2 examined whether the role of arousal extends from sexual interest to
auctions. We predicted that auction bidders would attribute feelings of arousal to a cognitive
construct, interest, even when that arousal was primed independently from the auction.
Specifically, we investigated whether recalling a past experience marked by feelings of arousal
in a competitive situation (for similar manipulations, see Galinsky, Gruenfeld, & Magee, 2003;
Gollwitzer, Heckhausen, & Steller, 1990) would increase current interest in an auction item,
which would then fuel bidding.
Pretest
Before conducting Experiment 2, we wanted to ensure that our arousal recall
manipulation would actually increase feelings of arousal. Thus, a pretest asked 51
undergraduates (39% men, 47% women) to complete the recall task and report their feelings of
arousal. In the high arousal condition, participants were told, “Please recall a particular
competitive incident in which you felt very aroused, stirred up, and excited. Try to re-experience
the event and feelings as vividly as possible. Please describe your feelings of arousal and
excitement and what happened in this competitive situation.” In the no arousal condition,
participants were told, “Please recall a particular competitive incident in which you felt very
quiet, peaceful, and calm…” After writing about their experiences, participants completed
Mano‟s (1991) index of arousal (Cronbach‟s  = .70). High arousal participants (M = 4.14, SD =
1.97) reported more arousal than no arousal participants (M = 2.97, SD = 1.69; t(49) = 2.25, p =
.03, d = .63), indicating that the manipulation was effective.
Method
Participants
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Participants were 53 undergraduates (22 men, 31 women) who were compensated $10.
The experiment had two between-participants conditions: no vs. high arousal.1
Procedure
Participants were informed that they would be completing several unrelated studies. They
first completed the recall task described in the pretest. Half of the participants recalled a
competitive situation when they felt aroused (high arousal condition); the other half recalled a
competitive situation when they felt peaceful and calm (no arousal condition). After a filler task,
participants read an auction bidding scenario in which they imagined that they were considering
buying a shirt on eBay and had found one that was described as “brand new with tags still on. It
is a blue short-sleeve 100% cotton shirt with a nice weave pattern woven into the material.” It
was early in the auction; no bids had been posted.
Dependent variables. Participants indicated the maximum number of bids they would
make before letting someone else win (from 0 to 10) and reported their interest in the shirt (from
1 “not at all” to 7 “very much”).
Results and Discussion
We predicted that the high arousal condition would increase interest in and bidding for
the shirt. As predicted, high arousal led to significantly more interest (M = 4.70, SD = 1.46) than
no arousal (M = 3.81, SD = 1.36; t(51) = 2.31, p = .025, d = .63). High arousal also led to
significantly more bids (M = 3.52, SD = 1.83) than no arousal (M = 2.46, SD = 1.92, t(51) = 2.05,
p = .045, d = .57). A mediation analysis indicated that interest partially mediated the effects of
the recall task on participant‟s number of bids (R2 increase = .11, F(1, 50) = 7.05, p = .01; Sobel
Z = 1.74, p = .08): arousal increased interest, which in turn increased bidding.
Arousal, interest, and auctions
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Extending previous research from sexual interest to auctions, Experiment 2 demonstrated
that the recollection of arousal in a competitive setting influenced interest and bidding in an
auction. Thus, arousal can also be misattributed as interest in an auction item, which then
translates to increased bidding.
Experiment 3
Unlike Experiment 2, Experiment 3 manipulated arousal independently of the
competitive context, via the creation of dissonance, and then assessed its impact on interest and
bidding. Classic social psychological research (e.g., Cooper & Fazio, 1984; Croyle, 1983; Elkin
& Leippe, 1986; Schachter & Singer, 1962) has shown that, when individuals perceive that they
have chosen to make a statement that contradicts their personal beliefs, they experience cognitive
dissonance, which results in a state of physiological arousal. The arousing and energizing
properties of dissonance have been demonstrated in several ways. First, dissonance affects task
performance much like other arousal states, increasing performance on simple tasks but
decreasing performance on complex tasks (Pallak & Pittman, 1972). Second, dissonance, like
other forms of arousal, can be (mis)attributed to plausible alternative sources (Cooper, Zanna, &
Taves, 1978; Zanna & Cooper, 1974). Finally, freely making counterattitudinal statements leads
to increases in nonspecific skin conductance (Croyle, 1983; Elkin & Leippe, 1986; Losch &
Cacioppo, 1990). Clearly, arousal is part and parcel of cognitive dissonance.
The perception of choice in performing a counterattitudinal behavior is a key driver of
dissonance and its concomitant arousal (for a review, see Cooper & Fazio, 1984; Croyle, 1983).
Thus, Experiment 3 manipulated whether participants had the choice to engage in
counterattitudinal advocacy and then measured interest and bidding in an auction.
Method
Arousal, interest, and auctions
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Participants
Participants were 24 undergraduates (8 men, 14 women, 2 missing responses) who were
compensated $10. The experiment had two between-participants conditions: no vs. high choice
in writing a counterattitudinal essay.
Procedure
Participants were informed that they would complete several unrelated studies. They
were first asked to write an essay about a campus policy issue. Because a pretest (Galinsky et al.,
2003) indicated that students were generally opposed to eliminating reading week (the class-free
week prior to examinations), participants were told that their essays would support eliminating
reading week.
Dissonance induction. Dissonance was manipulated by giving or not giving participants a
choice in writing this essay. No-choice instructions indicated, “You have been assigned to write
a list of arguments in favor of eliminating reading week. Therefore, you must argue in support of
eliminating reading week.” In contrast, the high-choice condition stressed the voluntary nature of
the task while simultaneously indicating a need for participants to list arguments in favor of
eliminating reading week. High-choice instructions indicated, “Although you are under no
obligation to write this, it would be very helpful for us. If you are willing to help us, please read
the statement below and provide your consent. „I know that I am not required to write a list of
arguments in favor of eliminating reading week, but do so voluntarily.‟” All participants in the
high-choice condition chose to write the essay. All essays continued from a starting statement
that we provided: “I believe that Northwestern University should eliminate reading week
because…”.
Arousal, interest, and auctions
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The auction. Participants then completed the auction bidding scenario used in Experiment
2.
Dependent variables. Participants indicated the maximum number of bids they would
make before letting someone else win (from 0 to 10) and reported their interest in the shirt (from
1 “not at all” to 7 “very much”).
Results and Discussion
We predicted that freely choosing to write a counterattitudinal statement, which has been
repeatedly shown to increase physiological arousal (Croyle, 1983; Elkin & Leippe, 1986; Losch
& Cacioppo, 1990), would increase interest and bidding in an auction item. As predicted,
dissonance increased interest. High-choice participants expressed more interest in the shirt (M =
5.25, SD = .97) than no-choice participants (M = 3.92, SD = 1.00; t(22) = 3.33, p = .003, d =
1.35). High-choice participants also indicated that they would make more bids (M = 3.67, SD =
.78) than no-choice participants (M = 2.25, SD = 1.49, t(16.62) = 2.93, p = .01, d = 1.19). In
addition, interest partially mediated the effects of dissonance on participants‟ number of bids (R2
increase = .12, F(1, 21) = 4.02, p = .06; Sobel Z = 1.72, p = .09). Thus, Experiment 3
demonstrated that a manipulation of arousal that was unrelated to either competition or auctions
still increased interest in an auction item, which then increased bidding.
General Discussion
By considering recent research on competitive arousal and auction fever, along with
classic research on the attribution of arousal, the current experiments have explored whether and
how arousal affects auction bidding. Experiment 1 demonstrated that high stakes and the
combination of high stakes and high time pressure (elements inherent in auctions) increased
arousal and bidding. In addition, whether manipulated through the recall of a prior arousing
Arousal, interest, and auctions
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competitive experience (Experiment 2) or cognitive dissonance (Experiment 3), arousal
consistently increased interest in an auction item and increased bidding.
Arousal
Research on emotions has addressed the effects of positively- and negatively-valenced
emotions (e.g., Forgas, 1989; Isen & Means, 1983; Mellers et al., 1998; Schwarz, 2000) as well
as specific emotions (e.g., anger vs. sadness) on decision-making processes and outcomes
(DeSteno et al., 2000; Lerner & Keltner, 2000, 2001; Raghunathan & Pham, 1999). The current
experiments expand these endeavors by highlighting the importance of understanding the
arguably more elemental effects of arousal on decision making.
Classic research on arousal has repeatedly demonstrated that the labeling of emotions and
subsequent actions depend on cognitive interpretations of arousal. Since unrelated, situational
factors can influence these cognitive processes, arousal can be misattributed to non-causal
stimuli (Dutton & Aron, 1974; Schachter & Singer, 1962; White et al., 1981; Zillmann, 1983;
Zillmann & Bryant, 1974). Consistent with this tradition, Experiments 2 and 3 manipulated
arousal via a recall prime and cognitive dissonance. Regardless of whether the induced arousal
was related to a competitive context, arousal was misattributed as interest in an auction item,
resulting in increased bidding. Thus, the current experiments increase our understanding of the
manifold effects of arousal and extend research on the arousal  interest link beyond the sexual
domain to auctions.
Arousal and Interest in Auctions, Competitions, and Conflicts
Auctions have typically been researched by economists (see Kagel, 1995; McAfee &
McMillan, 1987 for overviews) who assume that bidders act rationally. Only recently have
psychologists considered the role of arousal in bidding and auction fever (Ku et al., 2005).
Arousal, interest, and auctions
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Consistent with the notion of auction fever, Experiment 1 demonstrated that the structural
elements of an auction can fuel arousal and bidding. Although we only considered the effects of
stakes and time pressure, other auction features may also create arousal. For instance, economists
often consider the effects of differing auction formats on revenue generation (Kagel, 1995): in a
standard English auction, bidders verbally (or visually with a bid paddle) indicate their bids;
Dutch auctions, in contrast, start with a high price that decreases until someone makes the one
and only bid. It remains an open question as to which auction format is more arousing. For
instance, Dutch auctions may generate greater arousal than English auctions because the pressure
to make one „correct‟ bid or risk losing the item may be very arousing. Alternatively, English
auctions may generate more arousal as bidders vie with a rival for an item. Recent findings
showing that Dutch auctions led to higher final prices than English auctions (Lucking-Reiley,
1999), as well as some of our students‟ reports of feeling more excitement and tension in
classroom-based Dutch auctions, suggest that Dutch auctions may be more arousing. Similarly,
arousal may increase when bidding in front on an audience, under a strong spotlight, for an
auction item with a hyped description, or even after a double shot of espresso (Ku et al., 2005).
Thus, it is not surprising that auction organizers do all that they can to stimulate arousal.
Thoroughbred auctions, for instance, hype the event via glamour (people wear tuxedos and
formal gowns) and by employing bid spotters who roam the crowd, identifying bidders and using
social pressure and audience attention to encourage additional bidding. Similarly, arousal can
play a role in bidding wars, be they individual-level battles for highly sought-after MBA recruits
or organizational-level battles to acquire a company. Other domains also suggest a connection
between arousal, interest, and bidding: it seems clear that Las Vegas casinos are designed to
maximize both arousal (via a cacophony of auditory and visual noise) and disorientation (no
Arousal, interest, and auctions
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windows or clocks). Finally, it is common practice for entertainment agents to not only
encourage media attention for their clients, but also to solicit salacious coverage.
Understanding the role of arousal may also help mediators deescalate conflict and craft
effective solutions. In the volatile world of disputes, arousal, even when generated independently
from the conflict itself, may fuel competitive feelings and enmity. Third-party mediators,
therefore, may want to diminish their disputants‟ arousal states, by separating the disputants,
finding neutral and soothing contexts, and as Experiment 1 suggests, minimizing the stakes and
decreasing time pressure. In addition, since attributions of arousal are malleable (Schachter &
Singer, 1962), mediators may also try to re-direct disputants‟ arousal, potentially towards an
attribution of interest or satisfaction in the process. The role of arousal in markets, disputes, and
negotiations is certainly a topic for future research.
Finally, although anecdotal stories of auction fever are plentiful, individuals obviously do
not always overbid. One interesting explanation comes from research on social facilitation:
Zajonc‟s (1965) seminal work demonstrated that arousal increases the display of dominant
responses, which are determined by either contextual/structural features or by individual
differences. Future research might consider additional moderators of the arousal-bidding link,
even exploring situations when arousal might decrease bidding. For example, if aggression is
linked to overbidding (as the competitive arousal model would suggest), arousal may lead
individuals who are high on aggression to bid more, but it may lead individuals who are low on
aggression to bid less.
Conclusion
The current experiments have explored whether and how arousal can increase bidding in
auctions. Across three manipulations, arousal consistently increased bidding. In addition, arousal
Arousal, interest, and auctions
affected bidding by increasing individuals‟ interests in the auction items. By painting a more
complete picture of the role of arousal and interest in auctions, this research simultaneously
sheds light on the nature of arousal while increasing our theoretical knowledge of the
psychological processes inherent in auctions.
19
Arousal, interest, and auctions
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Table 1. Means (and Standard Deviations) for Stakes x Time Pressure Conditions in Experiment
1
Maximum Bids
Low Stakes
High Stakes
Low Time Pressure
431 (278)
490 (266)
High Time Pressure
379 (234)
611 (220)
Reported Arousal
Low Stakes
High Stakes
Low Time Pressure
3.11 (2.11)
3.85 (1.34)
High Time Pressure
3.80 (2.21)
5.02 (2.02)
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Endnotes
1
The design included a second factor, low ($1) vs. high ($25) starting price, which had previous,
significant effects (Ku, Galinsky, & Murnighan, 2006). The starting price x arousal interaction
affected neither interest nor bidding. Thus, we collapsed across starting price in our analyses.