Ebay Economics: Factors That Determine Online Auction Prices
We analyze online auction prices for top range Bordeaux wine sold on the German eBay site, evaluating the impact of eBay specifics such as auction length, timing of the auction end (day of week, time of day), number of bids, buyer interest (page count), seller reputation, initial prices, picture effects, or private auctions (bidder identity remains undisclosed). Moreover, we evaluate the impact of Parker's rating and whether this quality information is revealed. Other variables of interest are wine age, brands, regional origin, and the 1855 classification. We estimate a main model and two subsets (with page counter, initial bid equal 1). Our hedonic estimation of the full sample reveals that relative to Sundays, wine auctions ending on Fridays resulted in significantly higher prices (about 9%). Thus, we cannot confirm a weekend effect. Time of day effects are insignificant relative to the base period (21h-22h CET), except when auctions end in the morning (8h-12h CET) or late evening (22h-23 CET) and prices are 11% lower. We observe a small auction length effect (+2%). Seller reputation showed no significant impact on the final auction price except when the initial bid is 1. The number of bids showed a significant but small impact on final prices (+1.7%). The private auction effect (hidden bidder identity) is also significant at 5%. Moreover, Parker points carry an elasticity of 3.6 and disclosing them in the auction (information disclosure effect) results in a premium of 12%. Château (brand) effects are highly significant ranging up to 150% (Châteaux Pétrus and Margaux). Appellation premiums may exceed 90% (Pomerol). 1855 classifications are significant and in correct order except for Quatrièmes Crus.
|Date of creation:||2004|
|Contact details of provider:|| Postal: 555 East Wells Street, Suite 1100, Milwaukee, Wisconsin 53202|
Phone: (414) 918-3190
Fax: (414) 276-3349
Web page: http://www.aaea.org
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Alvin E. Roth & Axel Ockenfels, "undated".
"Last-Minute Bidding and the Rules for Ending Second-Price Auctions: Evidence from eBay and Amazon Auctions on the Internet,"
Papers on Strategic Interaction
2002-32, Max Planck Institute of Economics, Strategic Interaction Group.
- Alvin E. Roth & Axel Ockenfels, 2002. "Last-Minute Bidding and the Rules for Ending Second-Price Auctions: Evidence from eBay and Amazon Auctions on the Internet," American Economic Review, American Economic Association, vol. 92(4), pages 1093-1103, September.
- McAfee, R Preston & McMillan, John, 1987. "Auctions and Bidding," Journal of Economic Literature, American Economic Association, vol. 25(2), pages 699-738, June.
- Paul Milgrom & Robert J. Weber, 1981.
"A Theory of Auctions and Competitive Bidding,"
447R, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- 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.
- Carl Shapiro, 1983. "Premiums for High Quality Products as Returns to Reputations," The Quarterly Journal of Economics, Oxford University Press, vol. 98(4), pages 659-679.
- Paul Klemperer, 1999.
"Auction Theory: A Guide to the Literature,"
- repec:oxf:wpaper:1999-w12 is not listed on IDEAS
- Lucking-Reiley, David, 2000. "Auctions on the Internet: What's Being Auctioned, and How?," Journal of Industrial Economics, Wiley Blackwell, vol. 48(3), pages 227-252, September.
When requesting a correction, please mention this item's handle: RePEc:ags:aaea04:20407. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)
If references are entirely missing, you can add them using this form.