Abstract

Auction is very common among e-commerce sites. Economists believe auction is a more efficient pricing format than fixed price, in terms that buyer who values the good most will bid highest and wins the auction (Wang 1993; Wang et al. 2008). The assumption is that buyers are rational, and they bid according to their valuations of the goods, and valuations are fixed before the auction starts. This rationality assumption has been challenged by many empirical findings, such as findings on herding (Dholakia et al. 2001; Simonsohn et al. 2007), and overbidding (Lee et al. 2007). Consumer researchers examined online auctions from the lens of social psychology, and studied issues such as effects of expertise (Wilcox 2000), and pseudo endowment effect (Wolf et al. 2005). Researches in information systems filed have noted the role of information in facilitating bidding (Adomavicius et al.2005, Gregg et al. 2008).

Still, our understanding of buyer’s behavior in online auction is limited (Pinker et al. 2003). In particular, culture’s influence on online auction has received relatively little attention.

To study culture’s influence on auction, we leverage a framework of auction proposed by Ariely et al. (2003), and view auction as a multi-stage process, containing 1) auction choice/entry, 2) middle phase, and 3) end of auction. We adopt Hofstede’s cultural dimensions (Hofstede 1991) and propose to examine: 1) influence of uncertainty avoidance tendency on buyer’s intention to participate in auction, 2) influence of individualism/collectivism on buyer’s bidding behavior, and 3) influence of masculinity/femininity values on buyer’s perception of seller and intention to join future auction. We note that individuals identify with cultural values to different extent, and examine individual espoused cultural values instead of using the national culture scores (Oyserman et al. 2008; Srite et al. 2006).

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