Sniping and Squatting in Auction Markets
AbstractWe conducted a field experiment to test the benefit from late bidding (sniping) in online auction markets. We compared sniping to early bidding (squatting) in auctions for newly-released DVDs on eBay. Sniping led to a statistically significant increase in our average surplus. However, this improvement was small. The two bidding strategies resulted in a variety of other qualitative differences in the outcomes of auctions. We show that a model of multiple concurrent auctions, in which our opponents are naive or incremental bidders as identified in the lab, explain the results well. Our findings illustrate how the overall impact of naivete, and the benefit from sniping observed in the lab, may be substantially attenuated in real-world market settings. (JEL D44)
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Bibliographic InfoArticle provided by American Economic Association in its journal American Economic Journal: Microeconomics.
Volume (Year): 1 (2009)
Issue (Month): 2 (August)
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- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
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- Carpenter, Jeffrey & Holmes, Jessica & Matthews, Peter Hans, 2011.
"Jumping and sniping at the silents: Does it matter for charities?,"
Journal of Public Economics,
Elsevier, vol. 95(5), pages 395-402.
- Carpenter, Jeffrey & Holmes, Jessica & Matthews, Peter Hans, 2011. "Jumping and sniping at the silents: Does it matter for charities?," Journal of Public Economics, Elsevier, vol. 95(5-6), pages 395-402, June.
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Cahiers de recherche
- Grebe, Tim & Ivanova-Stenzel, Radosveta & Kröger, Sabine, 2010. "Buy-It-Now prices in eBay Auctions - The Field in the Lab," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 294, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
- Anthony M. Kwasnica & Katerina Sherstyuk, 2013. "Multi-Unit Auctions," Working Papers 201301, University of Hawaii at Manoa, Department of Economics.
- Kevin Hasker & Robin Sickles, 2010. "eBay in the Economic Literature: Analysis of an Auction Marketplace," Review of Industrial Organization, Springer, vol. 37(1), pages 3-42, August.
- Shahriar, Quazi & Wooders, John, 2011. "An experimental study of auctions with a buy price under private and common values," Games and Economic Behavior, Elsevier, vol. 72(2), pages 558-573, June.
- Nunley, John M. & Owens, Mark F. & Howard, R. Stephen, 2011. "The effects of information and competition on racial discrimination: Evidence from a field experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 80(3), pages 670-679.
- Bryan Lim, 2010. "The Case for Last-Second Bidding," Levine's Working Paper Archive 661465000000000343, David K. Levine.
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