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AN ANALYSIS OF STRATEGIC BEHAVIOR INeBAY AUCTIONS

Author

Listed:
  • RAUL GONZALEZ

    (Facultad de Economías, Universidad Autónoma de Nuevo León, Monterrey, N.L. México. A.P. 288, Mexico)

  • KEVIN HASKER

    (Department of Economics, Bilkent University, 06800 Bilkent, Ankara, Turkey)

  • ROBIN C. SICKLES

    (Department of Economics, Rice University, Houston, Texas 77005-1892, TX, USA)

Abstract

A relatively new type of panel data analysis is becoming more and more topical in the applied econometrics literature as auction mechanisms are being explored in more depth. The typical data utilized in such studies involves repeated measures of auction outcomes, where the variable of interest involves order statistics from the sample of bids from many bids on completed auctions for a particular commodity. This article presents structural estimates of bidding behavior in eBay computer monitor auctions. We exploit characteristics of such repeated measures to analyze the efficiency of private value auctions for a relatively homogeneous good, computer monitors sold on eBay. We discuss how outcomes of the auction mechanism can be analyzed and their equilibrium outcomes assessed and evaluate the consumer surplus that is generated from such auctions. Particular attention is given to the collection of the eBay data from data recovery protocols that monitor in real time and in relative detail, characteristics of a particular auction with heterogeneity controls for different types of monitors and for different reputation effects of the auctioneer. Among other findings, our results point to a rejection of the use of Jump Bidding (Avery, 1998) or "Snipe or War" bidding (Roth and Ockenfels, 2002). We also find that longer auctions only have a small effect on price and experienced auctioneers respond to this incentive.

Suggested Citation

  • Raul Gonzalez & Kevin Hasker & Robin C. Sickles, 2009. "AN ANALYSIS OF STRATEGIC BEHAVIOR INeBAY AUCTIONS," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 54(03), pages 441-472.
    • Handle: RePEc:wsi:serxxx:v:54:y:2009:i:03:n:s0217590809003422
    DOI: 10.1142/S0217590809003422
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    References listed on IDEAS

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    1. ., 1998. "Economic History," Chapters, in: John B. Davis & D. W. Hands & Uskali Mäki (ed.), The Handbook of Economic Methodology, chapter 27, Edward Elgar Publishing.
    2. David Lucking‐Reiley & Doug Bryan & Naghi Prasad & Daniel Reeves, 2007. "Pennies From Ebay: The Determinants Of Price In Online Auctions," Journal of Industrial Economics, Wiley Blackwell, vol. 55(2), pages 223-233, June.
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    Cited by:

    1. Chen, Kong-Pin & Lai, Hung-pin & Yu, Ya-Ting, 2018. "The seller's listing strategy in online auctions: Evidence from eBay," International Journal of Industrial Organization, Elsevier, vol. 56(C), pages 107-144.

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    More about this item

    Keywords

    Internet auctions; English auctions; structural econometrics; simulated nonlinear least squares; C1; C7; D44; L1;
    All these keywords.

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General
    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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