Calor licitantis: Bidder's heat, also known as auction fever. The term was coined in ancient Rome to define the sometimes-irrational behavior of bidders at auctions.
The phenomenon of calor licitantis probably has been around since the invention of auctions, but only since the rise of eBay has there been a convenient way to study it. In "The Bidder's Curse," their 2006 paper on auction behavior, Hanh Lee, of Stanford, and Ulrike Malmendier, of U.C. Berkeley, summarized their observations of thousands of eBay auctions for relatively common items such as a personal-finance board game, CashFlow 101. In the case of the game, the opening bid was generally set at around $45 and the "buy-it-now" price at $125.
Author Ellen Ruppel Shell describes what happened in her book Cheap: The High Cost of Discount Culture (2009):
Astonishingly, 43 percent of CashFlow 101 buyers blew right past the "buy-it-now" price and paid more. Some even exceeded the $195 retail price. ... Malmendier and her team wondered if there might be something special about CashFlow 101 buyers and decided to test other goods. They observed thousands of auctions for iPods, and, again, 45 to 50 percent of eBay users paid more than the "buy-it-now" price. Malmendier's team then expanded their investigation, to include auctions of men's cologne, perfume, and autobiographies of both Barack Obama and Bill O'Reilly (presumably to catch both Democratic and Republican eBayers). Incredibly, they found that, again, between 40 and 50 percent of buyers paid more than the "buy-it-now" price. Buyers seemed to derive significant pleasure from bidding—even more pleasure, it seemed, than they did from getting the desired item at the lower price.
Shell observes:
In Rome, bidders afflicted with calor licitantis were sometimes forgiven their lapse and had their money returned. Unfortunately, eBay makes no such provision.
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