Value of Emotion: Effects of Visceral Factors on Economic Behavior

The phenomenon of auction fever occurs when participants overbid for a certain good. Current theory suggests that there are two primary mechanisms that cause this: social influence and object- driven effects. The environment created by those within an auction and the desire to own the good drives the bidding past the appraised value. These value-changing mechanisms have the potential to be further affected by emotional stimuli or visceral factors impacting the individuals participating. As it stands, there is limited research regarding the influence of these affective states and how feelings like sadness or happiness alters valuation and behavior directly. This study finds that an emotional stimulus may not cause a change in behavior on its own. Rather, these visceral states can only induce a change in behavior when working within a setting that already contains value-influencing mechanisms, like those present within an auction. As a result, I propose a change to current utility theory that accounts for the influence of emotion and other visceral states on behavior, and how it works in conjunction with market conditions. From here, further understanding of individual market behavior can be gained