Abstract

The paper theoretically elaborates and empirically investigates the "competitive arousal" model of decision making, which argues that elements of the strategic environment (e.g., head-to-head rivalry and time pressure) can fuel competitive motivations and behavior. Study 1 measures real-time motivations of online auction bidders and finds that the "desire to win" (even when winning is costly and will provide no strategic upside) is heightened when rivalry and time pressure coincide. Study 2 is a field experiment that alters the text of e-mail alerts sent to bidders who have been outbid; the text makes competitive (vs. non-competitive) motivations salient. Making the desire to win salient triggers additional bidding, but only when rivalry and time pressure coincide. Study 3, a laboratory study, demonstrates that the desire to win mediates the effect of rivalry and time pressure on over-bidding.