Do consumers prefer auctions that allow them to place more precise bids to auctions that accept less precise bids? Can consumers accurately estimate their need for price-elicitation precision? This research addresses these questions by applying the notion of compatibility to the relationship between consumers’ bidding price uncertainty and the precision implied by the price-elicitation task. Data from four experiments show that when consumers are uncertain about the optimal bidding price, decision tasks requiring elicitation of precise bids lead to lower decision confidence, and vice versa. It is further shown that consumers display stronger preference for high-precision auctions, even though such auctions are associated with less confident pricing decisions.


*Alexander Chernev is associate professor of marketing at Kellogg School of Management, Northwestern University, 2001 Sheridan Road, Evanston, IL 60208 (ach@northwestern.edu). The author thanks Pierre Chandon, Ryan Hamilton, Vincent Nijs, the editor, the associate editor, and the three anonymous reviewers for their advice and constructive comments.

download full journal