Abstract
Penny auction, an emerging popular auction mode, requires bidders to pay for each bid. Since its mechanism is different from traditional ones, the results of past studies may not be applied to this auction model. The goal of this study is to explore the drivers of engaging in penny auction. Perceived fairness and perceived value are the major cognitions we investigated. We inferred that certain mechanisms adopted by penny auctions may enhance perceived value and fairness of penny auction. An online experiment was implemented to examine the proposed hypotheses. The results confirmed most of our hypotheses – (1) intention to bid is a function of perceived hedonic value, transaction utility, and perceived price fairness and (2) bidding mechanisms have effects on bidders’ perceptions. Implications for researchers and practitioners are also provided.
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