Response times in the wild: eBay sellers take hours longer to reject high offers and accept low offers

Abstract

Hesitation in the marketplace has the potential to betray private information. Recent results from lab experiments have confirmed that subjects’ response times reveal their strength-of-preference or belief, even in strategic settings. What remains unclear is whether these results extend beyond the lab to markets with experienced agents. Here we address this question using a dataset consisting of millions of bargaining exchanges from eBay. We find that the time it takes sellers to accept or reject offers is strongly related to the size of the offer. Sellers are quick to accept good offers and to reject bad offers, and slow to accept bad offers and to reject good offers. These response-time differences are on the order of hours. These findings apply to a majority of the exchanges on eBay, and are even stronger with more experienced sellers. Overall, these results indicate that there is information in response-time data from non-lab markets, and that a majority of agents do not have prepared strategies but instead evaluate offers on the spot in a way that reveals their values for the goods.