Bid early and get it cheap - Timing effects in Internet auctions
AbstractMost internet auction sites, like eBay, use a proxy bidding system where bidders can put in their maximum bid and let a proxy bidder (a computer) bid for them. Yet many bidders speculate about how to bid and employ bidding strategies. This paper examines how the timing of bids can affect the ﬁnal price. In a unique data set of 17,000 Scandinavian furniture auctions it turns out that early price increases, i.e. much early bidding, scare off bidders and therefore result in lower prices, whereas much late bidding results in higher prices. Sniping is therefore not a successful strategy to avoid bidding wars.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 14811.
Date of creation: Mar 2008
Date of revision:
Internet auctions; Auction fever; Pseudo-endowment; Bidding behavior; eBay; Strategies; WTP;
Find related papers by JEL classification:
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- D4 - Microeconomics - - Market Structure and Pricing
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- Alvin E. Roth & Axel Ockenfels, .
"Last-Minute Bidding and the Rules for Ending Second-Price Auctions: Evidence from eBay and Amazon Auctions on the Internet,"
Papers on Strategic Interaction, Max Planck Institute of Economics, Strategic Interaction Group
2002-32, Max Planck Institute of Economics, Strategic Interaction Group.
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NBER Working Papers
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Games and Economic Behavior, Elsevier,
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- Axel Ockenfels & Alvin E. Roth, 2003. "Late and Multiple Bidding in Second Price Internet Auctions: Theory and Evidence Concerning Different Rules for Ending an Auction," CESifo Working Paper Series 992, CESifo Group Munich.
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- Bramsen, Jens-Martin, 2008. "A pseudo-endowment effect in internet auctions," MPRA Paper 14813, University Library of Munich, Germany.
- Bramsen, Jens-Martin, 2008. "Learning to bid, but not to quit – Experience and Internet auctions," MPRA Paper 14815, University Library of Munich, Germany.
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