With an increasing number of products sold in online auctions, the effect of reference points on consumers’ product valuations has received
much attention in the literature. Two potentially relevant factors affecting bidders’ preferences are the sellers’ reserve price and the competing
bids by other bidders. The current evidence regarding these reference points is mixed. We argue that a focus on studying bids prevents a
clear identification of reference point effects. Directly observing product valuations, in two experiments, we find that willingness to pay in
online auctions is affected by both reserve prices and competing bids, supporting the constructed values paradigm. Copyright © 2015 John
Wiley & Sons, Ltd.