Some Evidence on Late Bidding in Ebay Auctions

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Editorial DirectorJan Smets, Member of the Board of Directors of the National Bank of Belgium Statement of purpose:The purpose of these working papers is to promote the circulation of research results (Research Series) and analytical studies (Documents Series) made within the National Bank of Belgium or presented by external economists in seminars, conferences and conventions organised by the Bank. The aim is therefore to provide a platform for discussion. The opinions expressed are strictly those of the authors and do not necessarily reflect the views of the National Bank of Belgium. Orders AbstractBidding in the last seconds or minutes of an auction is a common strategy in Internet auctions with fixed end-times. This paper examines the three explanations of late bidding in eBay auctions that survived the first scrutiny in Roth and Ockenfels (2002). There is no indication that late bidding could lead to collusive gains for bidders. Late bidding is a strategic response to the presence of bidders placing multiple bids. Experts protecting their private information are typically the last to bid while collectors are often the first. As bidders gain familiarity with eBay rules, they tend to bid slightly earlier.JEL-code: D44 (Auctions).

Pricing Strategies in the Electronic Marketplace

“…One explanation is that sniping may strategically mitigate competition among bidders and thus lead to lower winning prices (Roth and Ockenfels 2002;Schindler, 2003). However, both Gonzalez et al (2009) and Wintr (2008) fail to find supportive evidence in more recent eBay data.…”

Good Bids Come to Those Who Wait: The Value of Late Bidding in Online Auctions

“…Empirical studies, however, have failed to identify significant differences in the final sale prices of auctions with and without late bids. Wintr (2008) finds no significant differences in sale prices across a range of commonly listed computer equipment in auctions with late bids versus those without. Ely and Hossain (2009) explicitly test whether late bids generate differential surplus to early bids.…”

“…In addition to these structural reasons for Equation (2), the empirical evidence documents that winning bids for auctions on identical items with sufficiently frequent listings tend to exhibit little volatility, and the timing of a bid does not generate econonomically differential surplus (Wintr, 2008;Ely & Hossain, 2009). A bidder may observe these tendencies and conclude that she cannot game her rivals into submitting lower bids or that whatever marginal surplus she might hope to extract is not worth the effort required to do so.…”

Collusion or Sniping in Simultaneous Ascending Auctions — A Prisoner's Dilemma

“…Bids below valuations in previous c Sniping is a widely accepted stylized fact and has several reasons: sniping prevents incremental (Wintr [2008]) and shill bidding (Engelberg and Williams [2009]), it prevents the revealing of information during early stages (Rothkopf et al [1990]) or is due to uncertainty over one's own private valuation (Rasmusen [2006] stages are arbitrary. Bids above valuations bear a risk of paying more for the object than the object is worth.…”