Measuring Emotions in Electronic Auctions

Auctions are nowadays a popular and frequently employed market mechanism in electronicmarkets. In economic literature, the success of electronic auctions has been largelyattributed to the reduction of transaction costs, the large number of potential buyers,and the independence of time and space. However, an additional explanation for thesuccess of electronic markets, and in particular Internet consumer auctions, is the hedonicor emotional value bidders derive from auction participation. The emotionalitybidders experience in Internet auctions confronts a market engineer of electronic marketswith two important challenges, regarding both the auction mechanism design and theuser interface design. First, how can an auction system induce emotionality and, thus,attract excitement oriented consumers? Second, what is the impact of emotionality onbidding behavior? In order to approach both challenges, a market engineer needs to beable to actually measure emotions in electronic auctions.This thesis develops a structured methodology that allows to systematically analyzeemotions in electronic auctions. It provides a unified framework for emotional biddingin electronic auctions, which comprises the bidders’ processes of cognitive reasoning andemotional processing. Moreover, a methodology for measuring physiological correlatesof human emotional processing in economic experiments is proposed: physioeconomics.Physioeconomics extends existing methods of experimental economics by measuring autonomicnervous system activity using well-established psychophysiological methodologyin order to gain a profound understanding of human economic decision-making. Basedon the framework for emotional bidding and the methodology of physioeconomics, thisthesis describes how emotions and their impact can be measured in electronic ascendingauctions, and provides a proof-of-concept study.Moreover, an experiment was conducted in order to analyze the impact of clock speedson the bidders’ emotional processing and behavior in Dutch auctions. Several pre