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The impact of jump bidding in online auctions

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  • Yongfu He
  • Peter Popkowski Leszczyc

Abstract

This paper reports findings of two field studies, conducted on a local online auction website, that compare bidding strategies in charity and non-charity auctions, focusing on the extent of jump bidding at different stages of auctions. Results indicate that jump bidding is negatively correlated with bidder entry and positively associated with ending prices. These correlations are greatest during the beginning stage of auctions and are substantially larger for charity auctions than for non-charity auctions. Additionally, early-stage jump bidding occurred more often in charity auctions (consistent with bidders trying to drive up prices in charity auctions), ending-stage jump bidding was more frequent in non-charity auctions (possibly used strategically to win the auction). Further, frivolous products tended to sell at a higher proportion of retail value in charity auctions, providing a replication of the results of previous researchers but in a field setting. Copyright Springer Science+Business Media New York 2013

Suggested Citation

  • Yongfu He & Peter Popkowski Leszczyc, 2013. "The impact of jump bidding in online auctions," Marketing Letters, Springer, vol. 24(4), pages 387-397, December.
    • Handle: RePEc:kap:mktlet:v:24:y:2013:i:4:p:387-397
    DOI: 10.1007/s11002-013-9228-3
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    References listed on IDEAS

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    1. Isaac, R. Mark & Salmon, Timothy C. & Zillante, Arthur, 2007. "A theory of jump bidding in ascending auctions," Journal of Economic Behavior & Organization, Elsevier, vol. 62(1), pages 144-164, January.
    2. Ernan Haruvy & Peter Popkowski Leszczyc & Octavian Carare & James Cox & Eric Greenleaf & Wolfgang Jank & Sandy Jap & Young-Hoon Park & Michael Rothkopf, 2008. "Competition between auctions," Marketing Letters, Springer, vol. 19(3), pages 431-448, December.
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    6. Ernan Haruvy & Peter T. L. Popkowski Leszczyc, 2010. "The Impact of Online Auction Duration," Decision Analysis, INFORMS, vol. 7(1), pages 99-106, March.
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    13. Peter T. L. Popkowski Leszczyc & Michael H. Rothkopf (deceased), 2010. "Charitable Motives and Bidding in Charity Auctions," Management Science, INFORMS, vol. 56(3), pages 399-413, March.
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    Cited by:

    1. David Ettinger & Fabio Michelucci, 2016. "Creating a winner’s curse via jump bids," Review of Economic Design, Springer;Society for Economic Design, vol. 20(3), pages 173-186, September.
    2. Hungria Gunnelin, Rosane, 2020. "Bidding strategies and winner’s curse in auctions of non-distressed residential real estate," Working Paper Series 20/13, Royal Institute of Technology, Department of Real Estate and Construction Management & Banking and Finance.
    3. repec:dau:papers:123456789/15048 is not listed on IDEAS
    4. David Ettinger & Fabio Michelucci, 2016. "Hiding Information in Open Auctions with Jump Bids," Economic Journal, Royal Economic Society, vol. 126(594), pages 1484-1502, August.
    5. Brouwer, Anne Sjoerd & van den Broek, Machteld & Seebregts, Ad & Faaij, André, 2015. "Operational flexibility and economics of power plants in future low-carbon power systems," Applied Energy, Elsevier, vol. 156(C), pages 107-128.
    6. Marie BLUM, 2021. "Auction hosts: are they really impartial?," Working Papers of LaRGE Research Center 2021-09, Laboratoire de Recherche en Gestion et Economie (LaRGE), Université de Strasbourg.
    7. Martin Spann & Robert Zeithammer & Marco Bertini & Ernan Haruvy & Sandy D. Jap & Oded Koenigsberg & Vincent Mak & Peter Popkowski Leszczyc & Bernd Skiera & Manoj Thomas, 2018. "Beyond Posted Prices: the Past, Present, and Future of Participative Pricing Mechanisms," Customer Needs and Solutions, Springer;Institute for Sustainable Innovation and Growth (iSIG), vol. 5(1), pages 121-136, March.
    8. Delnoij, Joyce & Rezaei, Sarah & Rijt, Arnout van de, 2023. "Jump bidding does not reduce prices: Field-experimental evidence from online auctions," Journal of Economic Behavior & Organization, Elsevier, vol. 209(C), pages 308-325.

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