Reverse Auction Bidding – Impact of Personality Type on Bidding Strategy and Profit

Abstract

This research into Reverse Auction Bidding (RAB) is the first of the twenty four studies completed to this time to use an individual with personality type Idealist specifically against other personality types. Amongst all studies, result of one of the previous studies showed that personality type Idealist won over personality type Guardian and it was the first where this unexpected result was observed. This study attempts to verify the previous finding that an Idealist performs better than a Guardian, as Guardians are the usual winners.

RAB is a new form of bidding using internet as the bidding tool. In RAB the buyer and a set of sellers adopt a slightly different role than in Forward Auction.

This study used four students from the Department of Construction Science at Texas A&M University as the subjects of the work. Specific details of the game are that each bidder has capacity to bid on three jobs at any time. All bidders initially have a bank amount of $40,000 and can buy additional capacity from the bank to increase the number of allowed simultaneous bids. Each game lasts for twenty minutes, fifteen minutes of game play followed by a five minute break.

In each study, each individual participant was given a personality test, Keirsey Temperament Sorter Test. All the participants were identified to be Guardians in this study. There was no individual with personality type Idealist. This is possible because of low proportion of Idealists’ in general. The original hypothesis looked to determine the impact of Idealists, but as will all research one must deal with the hand dealt. The study of four Guardians is in itself of interest and tolerably rare event, so the study looked at four Guardians. The implicit hypothesis in this study is that Guardians should all be economically efficient bidders.

It has been observed that when Guardians play against other personality type they outperform but when Guardians play against each other the profit drops significantly. This is an interesting problem, why do Guardians perform poorly against other Guardians should be the subject of further research.

The next stage is to look to the sub-groups within the Guardian personality type. The bidders with characteristic property ISTJ according to the Test, or also called Inspector, were more competitive than other Guardians. Further work is recommended to understand the behavior difference and bid pattern for sub categories of Guardians.