Newswise — University of Alberta School of Business Professor Peter Popkowski Leszczyc may well earn the title of Professor Auctioneer, as he runs three auctions during the next three weeks.
The marketing expert is on a quest to raise about $400,000 for charities around the city, while also conducting research on hundreds of items separate from the fundraisers, from which he donates a portion of the sales to charity.
In past charity auctions, when 25 per cent of the proceeds were donated to the charity, he found revenue was higher by up to 10 per cent, even after the 25 per cent was deducted. "It shows that when companies give something back to society it has a big impact on their corporate image. They come out ahead, both with the price, and with how people perceive them."
As well, people are usually willing to pay a bit more for items if they know part of the sale benefits a good cause. "If I have two identical MP4 players, I'll put one in the auction where 25% goes to the charity and one on regular auction where nothing goes to charity. Generally, people will pay more on the charity item, than on the regular item."
Popkowski Leszczyc's site, www.CampusAuctionMarket.com, is different from other online auction sites because there are no fees, since he created it specifically to study online bidding behaviour.
There are no reserve prices on the items he puts up for auction, although some of the items donated for charities have reserves. There are countdown times and proxy bidding (where you can state a maximum bid amount that will automatically counter opposing bids up to your maximum price limit).
The Auctions:1. The Edmonton Sun auction Oct. 28-30 included items such as a 2009 Hummer H3T, a 52 inch HDTV, a two-week golf trip to Thailand and more. Proceeds went to the United Way, Sign of Hope, Christmas Bureau of Edmonton and the Stollery Children's Hospital Foundation. 2. The Wings of Providence Charity Auction, Oct. 30 to Nov. 12 includes an Oilers' jersey - autographed by the entire 2007-08 team - and a framed Battle of Alberta picture by well-known artist Joan Healy. Last year the auction raised about $20,000 to support women with children who have experienced family violence.3. The University of Alberta is also doing an auction with proceeds going to the United Way Nov. 12 to Nov. 18. Bid items include golf and dinner packages and tickets to Oilers games.
Popkowski Leszczyc uses grants from the Social Sciences and Humanities Research Council (SSHRC) to purchase items for the site, separate from the charity auctions, such as computer products, digital cameras, digital camcorders, portable hard drives, DVD players, and other electronics, handy crafts, gift certificates and musical instruments.
From the sales of those items, he then studies behaviours such as how often people bid, whether they wait until the last minute, or whether they will place a large bid " called a jump bid - to signal how much they want a product.
"Clearly you find more jump bidding in charity auctions. People in charity auctions behave like volunteer shills " they're trying to raise money for the charity so they're doing it to push other people to bid more," said Popkowski Leszczyc. There is more jump bidding early in the auction than later, because the jump bidders may not actually want the item enough to pay the top dollar.
Jump bidding has two effects, he noted. "It cuts out less serious buyers and reduces competition, which normally means lower prices, but we also find it increases competitiveness among some of those left so it could increase the price. The aggressiveness really depends on the bidders."
And because he's been studying the online auctions for more than five years, Popkowski Leszczyc can now compare the behaviour of repeat visitors through their anonymous bidder ID numbers. Since 2003, his charity online auctions have raised more than $1.5 million.
Popkowski Leszczyc has also studied what he calls "bidding frenzy," where people get carried away and may pay more than they wanted to, regardless of whether they had a price limit set in their mind or not.
"Often people may not have a clear idea of the value. It's like you're willing to pay $100,000 for a house, but there's nothing in the market for that. So you adjust in your mind that you'll pay $120,000 but there's still nothing. Your valuation goes up depending on what others are paying," he said.
Popkowski Leszczyc said he's noticed more people now use "snipe bidding" at the last minute to get the best deal possible, but that happens more with regular auction items than with the charity items.
"Since I started studying this, more people are buying online and buying in online auctions. It's definitely more mainstream. Bidders have learned to wait until the last minute so they don't get into price wars."
Popkowski Leszczyc has been published in numerous journals, including Organizational Behaviour and Human Decision Process, the Journal of Retailing, and Marketing Letters.
He is also a collaborating on a new study called Buy-Now Price As a Value Signal in Online Auctions with fellow School of Business Professor Kursad Asdemir and Professor Chun (Martin) Qui from McGill University. The trio was recently approved for $113,950 in funding from SSHRC, although they started the research more than a year ago.
"We are finding that with buy-now pricing people can be influenced either consciously or unconsciously, especially if you're uncertain about the item, if the buy-now price is within a certain range," said Popkowski Leszczyc.
Related Links:www.CampusAuctionMarket.comhttp://www.bus.ualberta.ca/ppopkowski/
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