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Putting the Psychology of the Auction to Work for You | Rusty
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Putting the Psychology of the Auction to Work for You

Putting the Psychology of the Auction to Work for You


Putting the Psychology of the Auction to Work for You

If you have items to sell, an old-fashioned, in-person auction might just get you the very best price. It might not seem as convenient as a Craigslist ad or eBay listing, but there are subtle — yet powerful — psychological principles at play during a live auction that can drive up the price of your items, netting you more profit than a traditional sales transaction.

Why does this work? There are several factors that make people want to spend more at an auction:

The Thrill of Competition

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Humans are hardwired to want to win. It’s why we love sports, and why the election season has stretched into a year-long process: We can’t get enough of watching people compete to be number one. And when we get a chance to go head to head ourselves? Well, we’ll do almost anything to win.

When it comes to a live auction, scientists have even given this impulse a name: Auction Fever. Once the adrenaline is flowing and buyers want to win, they’re willing to pay way more than they originally planned in order to nab an item — a huge boon to the seller, who ends up the ultimate winner.

Creating Value

Creating Value

Creating Value

Humans are also designed by evolution to grab on to things they need, and they want these items more when they appear to be scarce — think of it as a way to horde needed items for future use. An auction takes advantage of the Scarcity Principle by holding up just one item at a time for sale: There can be only one winner, which automatically makes the item scarce, and therefore especially desirable to a room full of bidders.

In addition to making the item appear very unique and hard to get, a live auction also provides a particularly powerful version of Social Proof of an item’s value. When many bidders are interested, it serves to further reinforce an object’s value. After all, if everyone wants it, it must be great, right?

Peer Pressure

Another way a live auction is so powerful is the way it subtly creates peer pressure around the bidders. Their desires to win and beliefs that an item is valuable are reinforced by the crowd around them, and this also creates a powerful pressure to win the auction by bidding more. When bidders are being watched by peers, they’ll work harder to be seen as a winner in the eyes of their audience — further driving up the price. Peer pressure is much stronger in person than over a computer, to boot.

It’s no wonder that live auctions have stood the test of time — our brains can’t help loving them!


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