The Seller's listing strategy in online auctions: evidence from eBay
AbstractThe paper empirically studies why the sellers of identical commodities adopt dier- ent auction formats in the online auction, and the consequences thereof. We postulate that the sellers adopt dierent auction formats because of the dierences in their ex- perience and the number of items they have. We rst use these two characteristics to endogeneize the seller's choice between three auction formats: xed-price, buy-it-now (BIN), and pure auctions. We then estimate the dierences in sales rate, transaction price, and sale duration between the three formats. We nd that the xed-price auc- tion results in the highest transaction price and the lowest sale rate, while the pure auction is just the opposite, with the BIN auction falling in between. These results strongly suggest that there is a tradeo between price and sale probability in adopting dierent formats of auctions. We
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 38369.
Date of creation: 27 Mar 2012
Date of revision:
online auctions; buy-it-now; selling format; listing strategy;
Find related papers by JEL classification:
- L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- D02 - Microeconomics - - General - - - Institutions: Design, Formation, and Operations
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