An exploratory analysis of the effect of the “buy it now” option on sellers' revenues in silent auctions

Abstract

This paper tests three competing hypotheses regarding the effect of a ''buy it now'' option in silent auctions: that the option has a positive, negative, or neutral effect on the seller's revenues. These hypotheses were tested on 4 years of data from a university art museum's silent auctions. The results indicate that the ''buy it now'' option has a significant negative effect on the seller's revenues. Possible explanation, implications, and limitations are discussed.