Comparing bidding and pricing between in‐person and online auctions

Abstract

Examines the phenomenon of online auctions. Begins by developing a theoretical base for understanding how online and in-person auctions should differ in terms of consumer risk. Online auctions with seller reserve prices are compared to in-person auctions without seller reserve prices using data from 60 paired sales of collectible figurines. Online auctions are found to exceed in-person auctions in both mean initial bid prices and mean final sales prices.

Behavioral outcomes from online auctions: reserve price, reserve disclosure, and initial bidding influences in the decision process

“…Online auctions attract thousands, sometimes millions, of bidders for items ranging from commodities to collectibles (Massad and Tucker, 2000). Investors expect a tremendous amount of growth in online auctioning, assigning huge price/earning multiples to the major players in the industry (Massad and Tucker, 2000).…”

Optimal Starting Price for Ebay-Like Online Auctions

“…Thus, the effect of reserve pricing may be to lower the average price ultimately paid in seller reserve auctions, while increasing the average size of starting price [10] . Regarding auction interest, Vincent [11] argued that higher reserve prices have the effect of "increasing bidder participation at higher levels since the reserve would have the effect of eliminating low-valuation bidders from contention" [10] . Bajari and Hortacasu [12] found that the starting price is the most significant determinant of whether a bidder enters an auction.…”

“No sale” items in auctions: do they really matter?

“…The economics literature has a long and rich history of research involving traditional auctions. In recent years, marketing researchers have used online auction data to study a number of phenomena in a wide array of product categories (e.g., Cheema et al 2012;Haruvy and Leszczyc 2010;Hou and Blodgett 2012;Jap 2003;Häubl and Leszczyc 2003;Kamins et al 2004;Li et al 2009;Massad and Tucker 2000;Leszczyc and Häubl 2010;Sinha and Greenleaf 2000;Weinberg and Davis 2005;Dholakia et al 2002).…”

“…Kamins, et al (2004) used ANOVA and pairwise contrasts, and their data included no sale items. Massad and Tucker (2000) used bivariate regression and t tests, and only considered items that sold.…”