Online auctions, messaging, communication and social facilitation: a simulation and experimental evidence

This is a study of social facilitation effects in online auctions. We focus on the growth in online auctions, and the emergence of instant messaging and communication availability technologies. These two trends merge to provide a collaborative online social framework in which computer mediated communication may affect the behaviour of participants in online auctions. The interaction between buyers and sellers in traditional, face-to-face markets creates phenomena such as social facilitation, where the presence of others impacts behaviour and performance. In this study we attempt to replicate and measure social facilitation effects under the conditions of virtual presence. Does social facilitation apply to online auctions, and if so, how can it influence the design of online settings? We developed and used a simulated, Java-based Internet Dutch auction. Our findings indicate that social facilitation does indeed occur. In an experimental examination, participants improve their results and stay longer in the auction under conditions of higher virtual presence. Participants also indicate a preference for auction arrangements with higher degrees of virtual presence. Theoretically, this study contributes to the study of social facilitation, adding evidence of the effect when the presence is virtual.