The Psychology Behind Auctions and Bidding

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Did you ever stop to think why you buy something? There’s a whole science behind our buying what we buy, when we buy, and how we buy. It’s known as the psychology of the sale, and it can be quite fascinating to delve into. We’re going to look at the psychology of the sale, and then we look at how it applies to us when we are at or involved in an auction. Auctions have their own brand of sale psychology, as the principles and factors involved in sale psychology affect us slightly differently in an auction atmosphere.

Auction Bidding: A Social Science

Buying is a social thing. Sale psychology says that we will continue to buy as long as we can either improve our standing with our peers or improve our status in society as a whole through the purchase. When we are at an auction, that social factor is intensified by the setting. What we buy is immediately known to everyone else who attends. Heart rate increases, blood pressure rises, and we can actually become flushed with excitement at the thought of making a purchase in front of our peers. The auction as a social event appeals to us as well.

The Competition Factor

Psychologists tell us that part of the social factor behind our buying habits is a great deal competitive nature. We have to keep up with those Joneses, we have to move up the social ladder, we have to be at least equal with our peers. And that competitive nature can cause us to buy things we wouldn’t normally, or pay a higher price than we would consider fair. And to do both of those things without much thought or reason. There’s a real reason behind “buyer’s remorse” after all. We buy because not to means we lose out on something, and nobody likes losing. When it comes to auctions, those other folks in the room suddenly go from friends and neighbors to the enemy. They are trying to keep us from having the items we want. They are trying to stop us from winning. Even the very nature and language of auctions plays into this competitive thought—you give the winning bid, you beat the competition. In one study, people involved in an online auction were able to stay level-headed and bid reasonably as long as they thought they were simply testing auction software—bidding against a computer. In trials where they were told they were bidding against real human beings on the other end of their keyboards, they tended to bid too high and too aggressively, even going above the same prices they bid when against the computer.

Optimism About the Unknown

Part of the reason we’re so drawn to shows like Storage Wars is that we love the idea of hidden treasure—the hope of finding something super valuable or something to restore and sell for a big profit. You could find a priceless antique, expensive artwork, belongings of a famous person, a car, jewelry, and so on. You could also find a bunch of moldy books and a few dead rodents. But our human mind is wired to look for the possibilities. Just think of the 49ers during the Gold Rush of the mid-19th century. Men, women, and children ventured West in the hopes of striking it rich, even though the journey was filled with risks, even death. Storage auctions might not be quite as risky, but the sentiment remains. In this milieu of America’s financial recovery and the typical American’s lopsided work-life balance, we want to find an escape, a better way. We want to be autonomous, and we want to get rich. TV programs like Storage Wars show us a new route to financial independence, and the eternal optimist in us says “sign me up!” Have you ever been to a storage auction, or do you make your living from selling storage auction valuables? What draws you to this new national pastime? Image courtesy of iosphere at FreeDigitalPhotos.net