Ask almost any auctioneer and he or she will tell you that with more bidders the price goes up. We too have concluded the same many times, including here: https://mikebrandlyauctioneer.wordpress.com/2019/04/01/auctioneers-alpha-and-beta-and-more/.
Our thinking comes from conducting thousands of auctions ourselves and observing behavior as well as our theory that the chances of having the most interested bidder and the second-most interested bidder increase with the number of bidders.
A story about a 2018 research study seemed to suggest the same with this statement:
We found the quickness of being outbid by someone else causes consumers to perceive an auction as being more intensely competitive, which in turn boosts the desire to win and, ultimately, results in an increased willingness to pay …
However, a story about a 2019 research study concluded that the fewer the bidders, the more those bidders bid concluding with this statement:
The study suggested that the more bidders there are in an auction, the lower each individual bidder perceives their probability of winning, which has demotivating effect on their desire to win the auction.
For that matter, here’s story about a 2015 research study which suggested more bidders causing “auction fever” and higher prices:
The authors demonstrated that auctions where both time pressure and social competition are intense lead to so-called auction fever and higher bids. The catch is that the competition has to be other people, not computer-generated. “Arousal needs a focus in order to culminate in auction fever, and this focus stems from the social competition of bidding against human opponents …
There is an abundance of research out there concerning auctions and certainly people can interpret the results differently — or maybe secure the results they endeavor to find? It pays to be open to all such research, but view it with a discerning eye.
Concerning these aforementioned studies and the above reference to the “2019 research study,” this particular research appears to be an outlier given the many others we’ve reviewed, plus an plenteous amount of anecdotal evidence.
Mike Brandly, Auctioneer, CAI, CAS, AARE has been an auctioneer and certified appraiser for over 30 years. His company’s auctions are located at: Mike Brandly, Auctioneer, RES Auction Services and Goodwill Columbus Car Auction. He serves as Distinguished Faculty at Hondros College, Executive Director of The Ohio Auction School, an Instructor at the National Auctioneers Association’s Designation Academy and America’s Auction Academy. He is faculty at the Certified Auctioneers Institute held at Indiana University and is approved by the The Supreme Court of Ohio for attorney education.