UNDERSTANDING OVERBIDDING BEHAVIOR IN C2C AUCTIONS: AN ESCALATION THEORY PERSPECTIVE.

Drawing on escalation theory, this study develops and tests a model of the overbidding behavior exhibited by individuals in on-line auction settings. Our model posits that escalation drivers such as sunk cost, the completion effect, and self-justification affect an individual's willingness to continue bidding which, in turn, influences overbidding behavior.