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Shopping, gambling or shambling? Penny auctions

Author

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  • Robinson, Stacey G.
  • Giebelhausen, Michael D.
  • Cotte, June

Abstract

On penny auction websites, consumers participate in a game where the winner receives the opportunity to purchase a product for pennies on the dollar and discounts of over 90% are often advertised and recorded. Losers, on the other hand, may easily spend hundreds of dollars and walk away with nothing. For penny auction websites, profit margins over 300% on a single auction are not uncommon. Critics call penny auctions gambling. Proponents call penny auctions entertainment shopping. Either way, this emerging form of ecommerce represents a fascinating area for academic research.

Suggested Citation

  • Robinson, Stacey G. & Giebelhausen, Michael D. & Cotte, June, 2013. "Shopping, gambling or shambling? Penny auctions," Journal of Business Research, Elsevier, vol. 66(9), pages 1612-1616.
    • Handle: RePEc:eee:jbrese:v:66:y:2013:i:9:p:1612-1616
    DOI: 10.1016/j.jbusres.2012.12.005
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    References listed on IDEAS

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    1. Panle Jia, 2008. "What Happens When Wal-Mart Comes to Town: An Empirical Analysis of the Discount Retailing Industry," Econometrica, Econometric Society, vol. 76(6), pages 1263-1316, November.
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    Cited by:

    1. Ødegaard, Fredrik & Anderson, Chris K., 2014. "All-pay auctions with pre- and post-bidding options," European Journal of Operational Research, Elsevier, vol. 239(2), pages 579-592.

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