Fear Of Losing Drive People To Overbid On Ebay, Research Finds

Research carried out by a team of neuroscientists and economists at the New York University showed that emotion beats rationality when it comes to forking out more money that would normally deem reasonable when it comes to online auction.

In an experiement, they gave 17 people USD 15 and told them that they would could keep it if they won their auctions on which they would be bidding and a second group was given the same amount of money but were told they would lose the money if they lost the bid.

A third group, the control group, was given no incentive to win or lose the bid.

Although the outcome of the first two groups would be the same, the scientists have found out, using a functional magnetic resonance imaging (fMRI) machine to measure their brain activity, that people who were told that they would lose money have had the tendency to overbid compared to the other group.

This has caused some experts to say that the fear of losing is more pronounced that the joy of winning in human beings.

The results of the investigation bears some striking similarities with impulse buying that many high street shoppers will know about where they would often end up paying over the odds for something they could get cheaper elsewhere and that they don't need anyway.

It could also go some way into explaining the irrational behaviour of some traders in the stock market.