Want to ensure the bidding war over your last-generation iPad gets as heated as possible? Place a red banner on your auction page.
A new study finds that the color red inspires participants in online auctions to become more aggressive: When they see red, their average bid increases are higher than when they see blue. The benefit of this heightened competitiveness will accrue to you, the seller.
On the other hand, if the format involves negotiation rather than an auction — you set a “buy it now” price, for example, but invite people to email you their own offers — you’d be better off with a blue banner. Red again inspires competitiveness, and people will low-ball you.
“Consistent with physiological literature on the effects of color, we ﬁnd that exposure to red colors increases aggression,” the authors write.
Source: “The Effect of Red Background Color on Willingness-to-Pay: The Moderating Role of Selling Mechanism,” Rajesh Bagchi and Amar Cheema, Journal of Consumer Research (forthcoming)