The mere presence of others can sometimes be enough to change the way we make decisions. This might be something so simple as changing your order at breakfast so you don’t end up with the same meal as your friend (the horror!), or to something more serious like deciding when, and how much, to bid in an auction for your dream home. Given that some decisions can have more significant consequences than others (paying too much for a house vs you and I both having scrambled eggs), it is important that we can understand how certain social contexts affect our decision making.
Our recently published article examined how a competitive social context affects simple bidding decisions in a virtual Dutch auction. A Dutch auction is an exciting auction format where the price of an item begins at an exorbitant price and decreases until the first person makes a bid and wins the item. This auction format is unique as it presents a series of risky choices that requires groups to continuously choose between (i) a fast bid that would cost more or (ii) waiting for a cheaper price but risk losing to another participant!
Interestingly, we found that when our simulated auctions started at higher prices participants tended to pay more with higher bids. We also saw that different auction designs (e.g., a faster decrease in price, or variations in the number of items for sale on each auction) did not change the strategy that participants used to bid.
If you would like to find out more about the effects of competitive social contexts on group decision making, you can read the open access article at https://rdcu.be/cbwFC
Bennett, M., Mullard, R., Adam, M. T., Steyvers, M., Brown, S., & Eidels, A. (2020). Going, going, gone: competitive decision-making in Dutch auctions. Cognitive Research: Principles and Implications, 5(1), 1-22.
