Role of Ambient Temperature in Influencing Willingness to Pay in Auctions and Negotiations

Abstract

While temperature’s effects on human physiology have been well studied, its effects in decision-making contexts are still relatively unknown. The authors investigate the role of ambient temperature in one important decision-making context: consumer purchase. More specifically, they examine how ambient temperature influences consumers’ willingness to pay in different kinds of purchase contexts, such as in auctions and in negotiations. The authors show that whereas higher (vs. moderate) temperatures elicit higher willingness to pay in auctions, they lead to a lower willingness to pay in negotiations, and temperature-induced discomfort and aggression underlie these effects. The authors also study the effects of lower temperatures and extend these findings to more general competitive settings. They report findings from six studies and discuss theoretical, managerial, and policy implications.