The effects of induced mood on bidding in random nth-price auctions

We investigate the effects of mood on decisions in random nth-price auctions. There are two possible ways in which mood can affect behavior: (1) mood can affect the valuation of the object being auctioned or the willingness to pay (WTP), and (2) mood can affect the bidding behavior itself. To identify these two possible effects, we study decisions with induced values and with homegrown values. Our data show that positive mood generates an upward bidding bias in the induced value condition. However, only under certain conditions do we observe weak mood effects on WTP.