Is there a "group mentality" at online auctions?

I came across this article, which I thought could interest some people here (especially chattelers)....

This article talks about the "herd behavior bias" at online auctions.... Essentially, it says that according to a recent study, people tend to follow a "herd mentality" at online auctions, being more likely to bid on auctions with already several bids, and less likely to bid on auctions with fewer bids.... Even if the auctions with fewer bids represent better value!

There's a phenomenon I've noticed with online auctions, which is that the auctions which often seem to me to get the highest prices are the $1 no reserve auctions! Probably the reason why is because when you start out with a $1 first bid, you're going to get many more bids in total.... and then the "herd behavior bias" would explain the rest....

I've linked to the article below.... :)

It's also related to the idea of "social proof" which Robert Cialdini talks about in his book, "Influence: The Psychology of Persuasion" (for those who have read it).... When there are more bids, people feel more comfortable adding their bid on the item too.

Knowing this could help you when you're buying or selling at an online auction....

That's because you know that to get a better price when you're BUYING, you should look at the auctions with FEWER bids, and buy at the LESS POPULAR auction sites (with FEWER people).

And to get a better price when SELLING, you could try starting the first bid at a very LOW price, to attract more bidders, and sell at the MOST POPULAR auction sites.... :)

Dien


"Herd Behavior Bias" at online auctions....

> This article talks about the "herd
> behavior bias" at online auctions....
> Essentially, it says that according to a
> recent study, people tend to follow a
> "herd mentality" at online
> auctions, being more likely to bid on
> auctions with already several bids, and less
> likely to bid on auctions with fewer
> bids....

I believe that it is true that people who are scanning the listings at an auction site tend to look closer at items that have a large number of bids. And if it happens to be something they are looking for, it increases the likelihood that they will bid on that item.

Bidders are also encouraged by the fact that since others are bidding in such large numbers, the item must be a "desirable" item of "exceptional value".

This bidding frenzy is almost always beneficial to the seller who may end up receiving an inflated price for the item.

I once offered a "box" on eBay expecting to accept $25 for it. A week later, after a flurry of bids the last day, I was tickled pink to see that the bids had risen to $272!

Hooray for the herds!

JDB


The $272 Box