Bidding wars

People pay more because they fear losing

A new study has found that people often pay more on eBay auctions because they fear losing.

Neuroscientists and economists at New York University studied the causes of overbidding by monitoring brain activity among a group of people playing two different games - an auction game with a partner and a lottery game alone.

Participants could win money in both games, but they had to outbid their partner in the auction game in order to do so. When participants lost their auctions, the neuroscientists reported increased activity in the section of the brain that deals with reward and punishment.

The researchers believe that the findings could apply to online bidding sites like eBay, and could explain why people often pay more than they had intended to at auctions.