Bramsen, Jens-Martin (2008): Bid early and get it cheap - Timing effects in Internet auctions.
Download (124kB) | Preview
Most internet auction sites, like eBay, use a proxy bidding system where bidders can put in their maximum bid and let a proxy bidder (a computer) bid for them. Yet many bidders speculate about how to bid and employ bidding strategies. This paper examines how the timing of bids can affect the ﬁnal price. In a unique data set of 17,000 Scandinavian furniture auctions it turns out that early price increases, i.e. much early bidding, scare off bidders and therefore result in lower prices, whereas much late bidding results in higher prices. Sniping is therefore not a successful strategy to avoid bidding wars.
|Item Type:||MPRA Paper|
|Original Title:||Bid early and get it cheap - Timing effects in Internet auctions|
|Keywords:||Internet auctions, Auction fever, Pseudo-endowment, Bidding behavior, eBay, Strategies, WTP|
|Subjects:||D - Microeconomics > D1 - Household Behavior and Family Economics > D12 - Consumer Economics: Empirical Analysis
D - Microeconomics > D4 - Market Structure and Pricing > D44 - Auctions
D - Microeconomics > D4 - Market Structure and Pricing
|Depositing User:||Jens-Martin Bramsen|
|Date Deposited:||24. Apr 2009 00:52|
|Last Modified:||15. Feb 2013 17:02|
Ariely, D., Heyman, J. and Orhun, Y.: 2004, Auction fever: The effect of oppo- nents and the quasi-endowment on product valuations, Journal of Interactive Marketing 18(4).
Ariely, D. and Simonsen, I.: 2003, Buying, bidding, playing or competing? value assessment and decision dynamics in online auctions, Journal of Consumer Psychology 13, 113–123.
Ariely, D. and Simonsohn, U.: Forthcomming, When rational sellers face non- rational consumers: Evidence from herding on ebay, Management Science .
Bajari, P. and Hortacsu, A.: 2003, The winner’s curse, reserve prices, and endogenous entry: empirical insights from ebay auctions, RAND Journal of Economics 34(2), 329–355.
Bajari, P. and Hortacsu, A.: 2004, Economic insights from internet auctions, Journal of Economic Litterature XLII, 457–486.
Hou, J.: 2007, Late bidding and the auction price: evidence from ebay, Journal of Product & Brand Management 16, 422–428.
Ku, G., Malhotra, D. and Murnighan, J. K.: 2005, Towards a competitive arousal model of decision-making: A study of auction fever in live and internet auctions, Organizational Behavior and Human Decision Processes 96(2), 89–103.
Lee, H. and Malmendier, U.: 2006, The bidder’s curse, Working Paper, Stanford University.
Ockenfels, A. and Roth, A. E.: 2002, The timing of bids in internet auctionsmarket design, bidder behavior, and artiﬁcial agents, AI Magazine 23(3), 79–87.
Ockenfels, A. and Roth, A. E.: 2006, Late and multiple bidding in second price internet auctions: Theory and evidence concerning different rules for ending an auction, Games and Economic Behavior 55(2), 297–320.
Roth, A. E. and Ockenfels, A.: 2002, Last-minute bidding and the rules for ending second-price auctions: Evidence from ebay and amazon auctions on the internet, American Economic Review 92(4), 1093–1103.
Wolf, J. R., Arkes, H. R. and Muhanna, W. A.: 2005, Is overbidding in online auctions the result of a pseudo-endowment effect?, Working Paper, Social Science Research Network.