Forward-looking Bidding in Online Auctions

Zeithammer, Robert

doi:10.2139/ssrn.468847

Cited by 41 publications

(35 citation statements)

References 18 publications

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“…Milgrom and Weber () have shown in sequential auctions for identical product (perfect substitutes) that all participating bidders reduce their bids in the first auction such that prices will be identical. Similarly, Zeithammer (, ) has shown that rational forward‐looking bidders who participate in a sequence of (overlapping) auctions for substitute products will shade their bids (when the future auctions are revealed to be more plentiful and when they occur sooner). Furthermore, in overlapping auctions the first of the auctions will provide price points for bidders in the second one.…”

Section: Theorymentioning

confidence: 99%

Does Higher Transparency Lead to More Search in Online Auctions?

Haruvy

Leszczyc

2014

Production and Operations Management

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In a controlled field experiment, we examine pairs of auctions for identical items under different conditions. We find that auction design features that are under the control of the auctioneer—including information transparency, number of simultaneous auctions, and the degree of overlap between simultaneous auctions—affect bidder search and choice. Clickstream data show that a significant relationship between information transparency and price dispersion can be linked to search. Specifically, the effect of information transparency on price dispersion is fully mediated by lookup behavior. Combining these findings, we make auction design recommendations regarding the provision of product and value information.

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Section: Theorymentioning

confidence: 99%

Does Higher Transparency Lead to More Search in Online Auctions?

Haruvy

Leszczyc

2014

Production and Operations Management

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“…When consumers face identical items that are auctioned off sequentially, the intertemporal trade-off is consequential and affects the bidding behavior (e.g., Zeithammer 2006). These include observations of consumers' reward points usage decisions in loyalty programs with expiration dates, usage consumption decisions for Internet or cell phone data access plans with a monthly fixed allowance that does not roll over, firms' markdown pricing for end-of-season clearance inventory, and sellers' pricing decisions on perishable goods such as ticket sales.…”

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confidence: 99%

Determining Consumers’ Discount Rates with Field Studies

Yao

Mela

Chiang

et al. 2012

Journal of Marketing Research

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Because utility/profits, state transitions, and discount rates are confounded in dynamic models, discount rates are typically fixed for the purpose of identification. The authors propose a strategy of identifying discount rates. The identification rests on imputing the utility/profits using decisions made in a context in which the future is inconsequential, the objective function is concave, and the decision space is continuous. They then use these utilities/profits to identify discount rates in contexts in which dynamics become material. The authors exemplify this strategy using a field study in which cell phone users transitioned from a linear to a three-part-tariff pricing plan. They find that the estimated discount rate corresponds to a weekly discount factor (.90), lower than the value typically assumed in empirical research (.995). When using a standard .995 discount factor, they find that the price coefficient is underestimated by 16%. Moreover, the predicted intertemporal substitution pattern and demand elasticities are biased, leading to a 29% deterioration in model fit and suboptimal pricing recommendations that would lower potential revenue gains by 76%.

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“…Numerous studies have investigated variables such as buyer and seller expertise and reputation, early vs late bidding behavior, the use of starting bids and reserve prices, length of auction and ending time, etc. (Ariely and Simonson, 2003;Chan et al, 2007;Dholakia et al, 2002;Kamins et al, 2004;Li et al, 2009;Bradlow, 2005, Reynolds et al, 2009;Suter and Hardesty, 2005;Yao and Mela, 2008;Zeithammer, 2006). This research has resulted in a rich understanding of auction design and bidder (consumer) behavior.…”

Section: Overviewmentioning

confidence: 99%

Do bidders compensate for shipping fees in online auctions?

Hou

Blodgett

2012

Journal of Services Marketing

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If you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. AbstractPurpose -The purpose of this paper is to determine whether online bidders adjust their offers downward to compensate for shipping fees; whether shipping fees affect the number of bids in an auction, and thus indirectly influence winning bid prices; and whether experienced bidders more fully compensate for shipping fees, as compared to less experienced bidders. Design/methodology/approach -Data were collected from eBay, covering 530 auctions of 19-inch LCD monitors and 242 auctions of 1921 Morgan Dollar coins. Several regression models were employed to test the hypotheses. Findings -Shipping fees had a large, negative effect on winning bids in monitor auctions, but had no effect in coin auctions. Auctions with larger shipping fees resulted in fewer bids, which in turn lessened winning bid prices. Experienced bidders adjusted more fully than inexperienced bidders in monitor auctions, in which the fees are more substantial.Research limitations/implications -Data should be collected on additional product categories, and in order to control for background variables a controlled experiment should be conducted. Practical implications -Shipping fees appear to result in greater revenues for online sellers. Even though monitor bidders adjust their offers downward to compensate for fees, each additional $1 of shipping fee resulted in an additional $0.05 of profit for sellers. Coin sellers appear to have profited dollar for dollar from fees. Originality/value -Previous research has only indirectly examined the impact of shipping fees on winning bid prices. Given the dramatic growth of online auctions in the past decade, an examination of shipping charges is of both practical and theoretical importance.

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Forward-looking Bidding in Online Auctions

Cited by 41 publications

References 18 publications

Does Higher Transparency Lead to More Search in Online Auctions?

Does Higher Transparency Lead to More Search in Online Auctions?

Determining Consumers’ Discount Rates with Field Studies

Do bidders compensate for shipping fees in online auctions?

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