What drives us to bid at auctions? In this episode, we throw it back to where it all began, revisiting our very first episode that set the stage for everything we’ve explored since. Behavioural biases—those sneaky little tricks your brain plays—are at the heart of this conversation, and we talk about all 12 of them, plus a few extras that make auctions the fascinating psychological arenas they are. Simon Russell, a behavioural scientist, joins us to break down the surprising ways our subconscious minds react under pressure. From something as simple as a free coffee outside an auction to the auctioneer’s clever use of anchoring, scarcity, and loss aversion, Simon explains how these cues shape our decisions. The reciprocity effect alone—a cup of coffee making you feel like you owe the auctioneer something—might have you rethinking the next time you pick up a bidder’s paddle. We also get into the emotional rollercoaster that happens when the stakes are high. The auctioneer’s job as a kind of circus master becomes clear when Simon talks about their subtle tactics, like smiling and nodding to encourage bids or creating a sense of urgency with phrases like, “First, second, third…” It’s all designed to keep you—and your wallet—engaged. Looking back, this conversation with Simon didn’t just lay the foundation for the podcast; it opened our eyes to how much of our behaviour at auctions (and in life) is guided by things we don’t even notice. And while the episode may be nearly seven years old, these lessons are just as relevant today. So, if you’re a seasoned bidder or just curious about what’s going on in your own head, this is one you’ll want to hear—or hear again. Episode Highlights: 00:00 - Introduction 01:43 - How the podcast came about 05:36 - Who is Simon Russell? 06:30 - What behavioural patterns did you observe at the auction? 07:24 - First bias: Reciprocity effect 10:43 - Does awareness of these biases help mitigate their impact? 11:45 - Second bias: Scarcity effect 16:24 - Third bias: Anchoring 24:46 - Fourth bias: Loss aversion 29:22 - Fifth bias: Framing effect 32:22 - Sixth bias: Sunk cost fallacy 33:36 - Seventh bias: Commitment and consistency effect 39:01 - Eighth bias: Social proof: Herd mentality 43:54 - Ninth bias: Recency effect 48:17 - Tenth bias: Mental accounting 51:31 - Eleventh bias: Overconfidence 54:45 - Twelfth bias: Disposition effect About Our Guest: Simon Russell is the founder and Director of Behavioural Finance Australia (BFA). At BFA he provides specialist behavioural finance training & consulting. His services are designed to improve financial decision-making, communication and engagement. He mostly works with fund managers, major super funds, financial advisers and other financial services professionals. Connect with Simon Russell: Website https://www.behaviouralfinanceaustralia.com.au/ LinkedIn https://au.linkedin.com/in/simonrussellaustralia Resources: Visit our website https://www.theelephantintheroom.com.au If you have any questions or would like to be featured on our show, contact us at: The Elephant in the Room Property Podcast questions@theelephantintheroom.com.au Looking for a Sydney Buyers Agent? https://www.gooddeeds.com.au Work with Veronica: https://www.veronicamorgan.com.au Looking for a Mortgage Broker? https://www.flintgroup.au Work with Chris: chrisbates@flintgroup.au Enjoyed the podcast? Don't miss out on what's yet to come! Hit that subscription button, spread the word and join us for more insightful discussions in real estate. Your journey starts now! Subscribe on YouTube: https://www.youtube.com/@theelephantintheroom-podcast Subscribe on Apple Podcasts: https://podcasts.apple.com/ph/podcast/the-elephant-in-the-room-property-podcast/id1384822719 Subscribe on Spotify: https://open.spotify.com/show/3Ge1626dgnmK0RyKPcXjP0?si=26cde394fa854765 See omnystudio.com/listener for privacy information.
