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The Seller's listing strategy in online auctions: evidence from eBay

  • Chen, Kong-Pin
  • Liu, Yu-Sheng
  • Yu, Ya-Ting

The 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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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 38369.

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Date of creation: 27 Mar 2012
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Handle: RePEc:pra:mprapa:38369
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  1. Wang, Ruqu, 1993. "Auctions versus Posted-Price Selling," American Economic Review, American Economic Association, vol. 83(4), pages 838-51, September.
  2. Chen, Jong-Rong & Chen, Kong-Pin & Chou, Chien-Fu & Huang, Ching-I, 2006. "A dynamic model of auctions with buy-it-now: theory and evidence," MPRA Paper 38371, University Library of Munich, Germany, revised 24 Nov 2011.
  3. Indranil Chakraborty & Georgia Kosmopoulou, 2004. "Auctions with shill bidding," Economic Theory, Springer, vol. 24(2), pages 271-287, August.
  4. 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.
  5. Edieal J. Pinker & Abraham Seidmann & Yaniv Vakrat, 2003. "Managing Online Auctions: Current Business and Research Issues," Management Science, INFORMS, vol. 49(11), pages 1457-1484, November.
  6. 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.
  7. Haruvy, Ernan & Popkowski Leszczyc, Peter T. L., 2010. "Internet Auctions," Foundations and Trends(R) in Marketing, now publishers, vol. 4(1), pages 1-75, March.
  8. Jeffrey A. Livingston, 2005. "How Valuable Is a Good Reputation? A Sample Selection Model of Internet Auctions," The Review of Economics and Statistics, MIT Press, vol. 87(3), pages 453-465, August.
  9. Stanley Reynolds & John Wooders, 2009. "Auctions with a buy price," Economic Theory, Springer, vol. 38(1), pages 9-39, January.
  10. Budish, Eric B. & Takeyama, Lisa N., 2001. "Buy prices in online auctions: irrationality on the internet?," Economics Letters, Elsevier, vol. 72(3), pages 325-333, September.
  11. Timothy Mathews, 2004. "The Impact of Discounting on an Auction with a Buyout Option: a Theoretical Analysis Motivated by eBay’s Buy-It-Now Feature," Journal of Economics, Springer, vol. 81(1), pages 25-52, 01.
  12. Kevin Hasker & Robin Sickles, 2010. "eBay in the Economic Literature: Analysis of an Auction Marketplace," Review of Industrial Organization, Springer, vol. 37(1), pages 3-42, August.
  13. Hammond, Robert G., 2010. "Comparing revenue from auctions and posted prices," International Journal of Industrial Organization, Elsevier, vol. 28(1), pages 1-9, January.
  14. Hidvegi, Zoltan & Wang, Wenli & Whinston, Andrew B., 2006. "Buy-price English auction," Journal of Economic Theory, Elsevier, vol. 129(1), pages 31-56, July.
  15. 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.
  16. Subir Bose & Arup Daripa, 2009. "Optimal sale across venues and auctions with a buy-now option," Economic Theory, Springer, vol. 38(1), pages 137-168, January.
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