Arousal, Interest and Auction Bidders

Abstract

Arousal is a diffuse emotional response that can have multiple effects. We present three studies that investigated arousal's effects on auctions, which are increasingly important engines of contemporary economies and represent social contexts particularly likely to generate and be influenced by arousal. We manipulated arousal in three ways: by changing two essential elements of auctions (stakes and time pressure); by asking participants to recall a competition in which they felt aroused or calm; and by creating cognitive dissonance. Across the studies, arousal consistently increased interest and bidding. The results support the competitive arousal model (Ku, Malhotra, & Murnighan, 2005) and provide a more complete picture of the effects of arousal, extending theoretical perspectives from romantic attraction, which suggest that arousal is a diffuse emotional state that can be misattributed as interest, to auctions. The discussion explores the broader implications of the role of arousal in decision making and markets.