The Happiness Premium: The Impact of Emotion on Individuals’ Willingness to Pay in Online Auctions

Abstract

Abstract:Much research across various disciplines has studied individuals' bidding behavior in online auctions. Emotion is an important factor affecting individual behavior, but we know little about its effects in online auctions. We conducted a lab experiment to investigate the impact of positive emotion on individuals' willingness to pay in online auctions. We found that individuals with positive emotions bid more than those with neutral emotions; that is, they paid a "happiness premium" of about 10 percent. The effect size was medium (Cohen's d = 0.51). This study contributes to electronic commerce literature by identifying emotion as an important factor affecting online auction behavior. The findings also provide guidance to auction website design: websites can increase bid amounts by inducing positive emotions in potential customers.

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“…Emotion refers to feelings about one's needs, goals, or concerns that stimuli evoke (Yuan & Dennis, 2016). While Gross and Muñoz (1995) noted that a true definition in the literature for emotion does not exist, Schachter and Singer (1962) defined emotion as "a state of physiological arousal and cognition appropriate to this state of arousal" (p. 380).…”

“…Health emotion is tied to individuals' emotional feelings related to their ongoing health condition (Rahman, 2015). Because emotion plays an important role in influencing an individual's decision-making process, attitude, and actual behavior (Yuan & Dennis, 2016), we believe that we cannot completely understand individuals' intention to continue to use HIT without understanding the effect that health emotion has on the HIT decision-making process.…”

The Priming Effects of Relevant and Irrelevant Advertising in Online Auctions

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