Regret under different auction designs: the case of English and Dutch auctions

Malekovic, N. and Goutas, L. and Sutanto, J. and Galletta, D. (2020) Regret under different auction designs: the case of English and Dutch auctions. Electronic Markets, 30. pp. 151-161. ISSN 1019-6781

Abstract

Studies have shown that users experience regret in online electronic auctions. Our study adds to the research on the antecedents of regret by examining the effects of the major types of auction design on users’ experience of regret. Towards this goal, we analyzed bidders’ experience of regret in English and Dutch auctions. Given that English and Dutch auctions are known to produce different types of bidding behavior and outcomes, we expect that the two types of auction design will also have a differential impact on experiencing regret. We report results from a lab experiment that was implemented as a self-developed mobile application for hotel room reservations. We examined the effects of the two open-bid auction types on the experience of regret, and found that users are more likely to experience regret in Dutch auctions. We point out the theoretical relevance and practical implications of our findings.