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The Determinants of Price in Internet Auctions of Used Cars

  • Thomas Andrews

    ()

  • Cynthia Benzing

    ()

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    This study analyzes how auction, seller, and product factors influence the price premium in an eBay used car auction market. In auctions with at least one bid, the reputation of the seller, title status, and the time the auction ended influenced the price premium on the highest bid. For auctions that resulted in a sale, cars with clear title and dealers were able to secure significantly greater price premiums, but seller reputation had no significant effect. Using a binary logit model, cars had a greater probability of selling if the seller had a better reputation. The quality of the presentation and number of pictures did not enhance the price premium in any of the models. Copyright International Atlantic Economic Society 2007

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    File URL: http://hdl.handle.net/10.1007/s11293-006-9045-7
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    Article provided by International Atlantic Economic Society in its journal Atlantic Economic Journal.

    Volume (Year): 35 (2007)
    Issue (Month): 1 (March)
    Pages: 43-57

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    Handle: RePEc:kap:atlecj:v:35:y:2007:i:1:p:43-57
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    1. Patrick Bajari & Ali Horta�su, 2004. "Economic Insights from Internet Auctions," Journal of Economic Literature, American Economic Association, vol. 42(2), pages 457-486, June.
    2. Horstmann, Ignatius J & LaCasse, Chantale, 1997. "Secret Reserve Prices in a Bidding Model with a Resale Option," American Economic Review, American Economic Association, vol. 87(4), pages 663-84, September.
    3. Doug Bryan & David Lucking-Reiley & Naghi Prasad & Daniel Reeves, 2000. "Pennies from eBay: The Determinants of Price in Online Auctions," Vanderbilt University Department of Economics Working Papers 0003, Vanderbilt University Department of Economics.
    4. Jonathan L. Willis, 2004. "What impact will E-commerce have on the U.S. economy?," Economic Review, Federal Reserve Bank of Kansas City, issue Q II, pages 53-71.
    5. Daniel Houser & John Wooders, 2006. "Reputation in Auctions: Theory, and Evidence from eBay," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 15(2), pages 353-369, 06.
    6. Mikhail I. Melnik & James Alm, 2005. "Seller Reputation, Information Signals, and Prices for Heterogeneous Coins on eBay," Southern Economic Journal, Southern Economic Association, vol. 72(2), pages 305–328, October.
    7. Weinberg, Bruce D. & Davis, Lenita, 2005. "Exploring the WOW in online-auction feedback," Journal of Business Research, Elsevier, vol. 58(11), pages 1609-1621, November.
    8. Timothy Mathews & Brett Katzman, 2006. "The role of varying risk attitudes in an auction with a buyout option," Economic Theory, Springer, vol. 27(3), pages 597-613, 04.
    9. Cynthia G. McDonald & V. Carlos Slawson, 2002. "Reputation in An Internet Auction Market," Economic Inquiry, Western Economic Association International, vol. 40(4), pages 633-650, October.
    10. Sanjeev Dewan & Vernon Hsu, 2004. "Adverse Selection In Electronic Markets: Evidence From Online Stamp Auctions," Journal of Industrial Economics, Wiley Blackwell, vol. 52(4), pages 497-516, December.
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