Market structure and quality uncertainty: a theoretical framework for online auction research

Abstract

Given large numbers of buyers and sellers, with access to a wide variety of information, economic theory suggests that online auction markets should provide an efficient mechanism for establishing equilibrium prices. Previous research on online auction prices, however, is far from conclusive, having produced mixed findings. The seemingly inconsistent and sometimes contradictory results make it very difficult to integrate empirical findings into a coherent body of knowledge. The purpose of this paper is to present a framework that can reconcile previous findings and provide direction for future research. Accordingly, we propose a simple theoretical framework with two dimensions-market structure (thick vs. thin) and quality uncertainty (high vs. low). By examining the literature in the context of market structure and quality uncertainty we find that previous studies are not necessarily at odds, but that there is actually a fairly consistent pattern of results.

Repeated use of online auctions: investigating individual seller motivations

“…eMarketplace sellers are motivated by the value arising from reaching new buyers and by the legitimation arising through external recommendation sources (Rask and Kragh 2004). Thus, rather than the characteristics of eMarketplaces determining the benefits for sellers, it is the tactics used when acting in such markets (Hou and Blodgett 2010;Spann and Tellis 2006). This points to the importance of sellers' performance and effort expectancy.…”

Complex Temporal Structure of Activity in on-Line Electronic Auctions

“…The agents' activity on electronic markets has been studied for quite a long time now [1]. Besides the analyses of overall structure of on-line auctions [4], much attention was devoted to the problem of winning strategy [11,10,18,17,15,8] and timing of the placement of bids [2,13,18,7]. The study of network aspects of on-line auctions was initiated in the work [19] and then it was investigated in depth [20,5].…”