||Penny auction is a new business model of online auction. Consumers paying bidding fee is the main feature of this kind of auction sites. Through setting initial price from NT$ 0 and increasing small amount of auction price, consumers can acquire goods with low final price. Penny auction also accompanies high degree of entertainment. Although many consumers are attracted by features of penny auction sites, its bidding mechanisms generate lots of controversy which affects consumers’ intention to bid.|
This study investigated the bidding mechanisms of the current penny auction website as well as features of penny auction to understand the feelings which it may bring to consumers. Then we further use online experimental methodology to understand consumers’ perceived hedonic value, transaction utility, procedural fairness and price fairness to different bidding mechanisms. In addition, we explore the effect of four cognitions which we mentioned above on bidding intention.
The results of this study include: (1) 10 seconds countdown mechanism brings higher hedonic value to consumers than 30 seconds. (2) Buy now mechanism brings higher procedural fairness to consumers than Refund bids mechanism. (3) No new bidders mechanism brings higher transaction utility, procedural fairness and price fairness to consumers than without No new bidders mechanism. (4) Hedonic value, transaction utility and perceived price fairness have significantly positive impact on bidding intention. Our findings explore the effect of different mechanisms on consumers’ cognition and understanding the factors to influence consumers’ bidding intention. Then we provide advice to auction sites operators.
Keywords: Penny auction, Online auction, Bidding mechanisms, Hedonic value, Fairness cognition, Transaction utility, Bidding intention