eBay Auctions Research Articles

Surfing the net for software engineering notes

The World Wide Web is a wonderful place for research, but finding relevant information can sometimes be a problem. Most of the major search engines are great at finding key words or performing Boolean searches on key words, but there's no way to add meaning to the searches. For example, every month I pick a software engineering topic and search the web, looking for web sites containing research and reference material pertaining to the selected topic. Traditional Google searches yield tons of results, but very few of these hits actually wind up as featured sites in the column. When I run a search, instead of the reference and educational information I'm looking for, I get all sites relating to the selected topic, including advertising, jokes, blogs, eBay auctions and other content unsuitable for my purposes. I have no way of telling the search engines to show me all white papers or journal articles relating to "topic X".

Exploring auction databases through interactive visualization

We introduce AuctionExplorer, a suite of tools for exploring databases of online auctions. The suite combines tools for collecting, processing, and interactively exploring auction attributes (e.g., seller rating), and the bid history (price evolution represented as a time series). Part of AuctionExplorer's power comes from its coupling of the two information structures, thereby allowing exploration of relationships between them. Exploration can be directed by hypothesis testing or exploratory data analysis. We propose a process for visual data analysis and illustrate AuctionExplorer's operations with a dataset of eBay auctions. Insights may improve seller, bidder, auction house, and other vendors' understanding of the market, thereby assisting their decision making process.

Emergence of a Market for Southwest Airlines Frequent Flyer Awards

The Internet has facilitated the emergence of a secondary market for Southwest Airlines flight tickets awarded by its frequent flyer program. Possible reasons for the existence of this market are explored, because Southwest bans the sale of these travel vouchers. With data from eBay auctions, hedonic regression results show that a later expiration date, no blackout dates, and the inclusion of drink coupons have positive effects on the prices of these vouchers. Additional security fees and whether a voucher is in paper or electronic form do not appear to affect the price. It is calculated that by selling the voucher, the seller receives, on average, a $34 rebate on each round-trip flight traveled on Southwest.

Emergence of a Market for Southwest Airlines Frequent Flyer Awards

The Internet has facilitated the emergence of a secondary market for Southwest Airlines flight tickets awarded by its frequent flyer program. Possible reasons for the existence of this market are explored, because Southwest bans the sale of these travel vouchers. With data from eBay auctions, hedonic regression results show that a later expiration date, no blackout dates, and the inclusion of drink coupons have positive effects on the prices of these vouchers. Additional security fees and whether a voucher is in paper or electronic form do not appear to affect the price. It is calculated that by selling the voucher, the seller receives, on average, a $34 rebate on each round-trip flight traveled on Southwest.

Searching the Ebay Marketplace

This paper proposes a framework for demand estimation with data on bids, bidders' identities, and auction covariates from a sequence of eBay auctions. First the aspect of bidding in a marketplace environment is developed. Form the simple dynamic auction model with IPV and private bidding costs it follows that if participation is optimal the bidder searches with a reservation bid for low-price auctions. Extending results from the empirical auction literature and employing a similar two-stage procedure as has recently been used when estimating dynamic games it is shown that bidding costs are non-parametrically identified. The procedure is tried on a new data set. The median cost is estimated at less than 2% of transaction prices.

Information Assurance Seals: How They Impact Consumer Purchasing Behavior

Public accounting firms and other independent assurance providers have developed and marketed web assurance services resulting in a seal as an indicator of compliance. Academic research finds that seals potentially meet some of the most acute consumer concerns, but that consumers have inadequate understandings about the seals, and low regard for them. This study extends the research on the role of information assurance seals as an antecedent of trust by examining the use of seals on the eBay auction site. The study analyzes a sample of transactions in which buyers acted with their own money, and had time to learn about various signals and consider their strengths. The transactions are examined to see whether presence of a seal on the seller's web page made a significant difference on actual consumer purchasing behavior. Empirical tests found significant associations between the presence of seals and consumer purchasing behavior in both auction and posted-price contexts.

Digital Demand: Demand for Digital Cameras on eBay

The paper estimates the demand for new digital cameras sold in eBay auctions. EBay data seems to offer significant advantages over traditional transactions data for estimating demand for differentiated products. However, there are a number of concerns including censoring bias and the interpretation of the bidding behavior. This paper discusses these problems as well as possible solutions. The paper presents results from three different methods for estimating demand for differentiated products on eBay. The results suggest that the demand for digital cameras is highly elastic and there isn't a lot of substitution, particularly across brands.

EBay's Proxy System: A License to Shill

We introduce a bidding strategy which allows the seller to extract the full surplus of the high bidder in eBay auctions. We call this a Discover-and-Stop bidding strategy and estimate that 1.39% of all bids in eBay auctions are placed by sellers (or accomplices) who execute this strategy. We argue that this kind of shill bidding is unnecessarily effective due to eBay's proxy system and the predictability of other bidders' bids. We show that eBay could slightly modify its auction mechanism to reduce the shilling we describe. We also model eBay auctions with shill bidding and find that, in equilibrium, eBay's profits are higher with shilling than without it.

The effects of shilling on final bid prices in online auctions

An increasing number of reports of online auction fraud are of growing concern to auction operators and participants. In this research, we discuss reserve price shilling, where a bidder shills in order to avoid paying auction house fees, rather than to drive up the price of the final bid. We examine the effect that premium bids have upon the final selling price, since they are linked with reserve price shill bids. We use 10,260 eBay auctions during April 2001, and identify 919 auctions involving 322 sellers and 1583 bidders involved in concurrent auctions for the exact same item. We find that premium bidding occurs 23% of the time, in 263 of the 919 auctions. Using a theoretical perspective involving valuation signals, we show that other bidders may view high bids as signals that an item is worth more. Thus, they may be willing to pay more for the items than others that do not receive premium bids. The implications are disturbing in that sellers may be more motivated to enter a shill bid in order to drive up the final price in an online auction. We also examine and report on alternative hypotheses involving winner’s curse and the possibility of reserve price shill bids. Our results are developed in the context of a weighted least squares regression model that predicts an item selling price-to- average selling price ratio.

What Attracts Bidders to Online Auctions and What is Their Incremental Price Impact?

Based on data from eBay auctions of classic comic books, we explore the determinants of the number of bidders in online auctions and the impact of additional bidders on the auction price. We test for winner's curse and examine how secret reserve prices impact both bidding activity and the auction price. In our data set, the number of bidders varies widely from zero in 20.4% of the observed auctions to ten or more in 16.5% but 70% of this variation in bidder numbers is predictable based on the comic being auctioned and attributes of the seller and auction such as third party certification of the comic's condition, the seller's reputation, and the length of the auction. Each additional bidder tends to increase the realized auction price about 2.4%. A minor part of this increase is apparently either because the auctions have a private value component or because some bidders fail to fully adjust for winners curse. However, most appears due to the inability of bidders to accurately determine the number of bidders they are bidding against. The presence of a secret reserve price sharply reduces the number of bidders in an auction but has little impact on what individual bidders are willing to bid.

Identifying Demand in Ebay Auctions

This paper presents assumptions and identification results for eBay type auctions. These results are for private value auctions covering three major issues; censoring bias, auction heterogeneity and dynamic bidding. The first section of the paper presents two identification results for second price open call auctions with private values and unobserved participation (eBay type auctions). The second section presents identification results for eBay type auctions that have either observed bidder heterogeneity, observed and unobserved item heterogeneity or unobserved auction heterogeneity. In particular it is shown that a traditional demand estimation model is identified. The third section presents identification results when bidders face an infinite sequence of eBay type auctions for a single item.

Seller Strategies on eBay

This paper analyzes seller characteristics and choices in approximately 1000 eBay auctions for a particular model of PDA. Seller characteristics include frequency of selling, reputation, and the qualities of the product sold. Seller choices include the length of the auction, information provided about the product, starting price, and whether to use a 'Buy it Now' option. We find that different types of sellers pursue systematically different strategies for how their items are offered, and we discuss the possible causes of these differences. For example, the two high volume sellers in our sample always use a combination of a 'Buy it Now' with a low starting price, while the many less frequent sellers use an array of pricing strategies. In addition, more highly rated sellers were somewhat more likely to provide more detailed product information, as well as secure payment options.

Selling Withdrawn and Gift Books on eBay

Abstract An eBay auction of donated or withdrawn books is another way to raise money for libraries. Because the process is labor-intensive, it is best suited to volunteers rather than salaried staff. The article describes the process used by one Friends of the Library group.

Who Wins on eBay: An Analysis of Bidders and Their Bid Behaviours

Online auctioning is one of the more successful business innovations on the Web. The auction format at eBay, the leading online auctioneer, has some unique characteristics including a fixed closing time for the bids and the use of a proxy bidding system that that is capable of acting as a bidder's agent. These features, coupled with third party products such as sniping software, have introduced novel bidder behaviours that may not occur in more traditional auction formats. In an attempt to study these behaviours, we collected and analysed data from over 11,000 eBay auctions. This paper presents the results of the analyses including descriptive information about the auctions and the classification of bids and bidders based on bid timing, frequency and strategy employed. The different types of bidders and their success rates offer insights into the nature of bidder participation in eBay auctions. In addition, chi‐square analyses reveal significant differences among the bidding strategies with respect to auc...

Investigating buyer and seller strategies in online auctions

The annual turnover of online auctions is already in tens of billions of dollars and this amount is predicted to grow substantially over the next few years. Hence, it is important to know how buyers and sellers can influence their chances of success. Therefore, data were collected from eBay auctions for three different categories of collectible items, namely those with a published guide price, those with a rough guide price and those having no easily obtainable guide price. The options available to buyers and sellers of items were then analysed. It was found that it was hard for the seller to influence an item's achieved price significantly, apart from items with no guide price where the starting price could have an effect. Most bidders bid close to the current value and so there were insufficient data to determine the consequences of timing on the placing of high bids. For low bids, delaying a bid was found to improve significantly the chances of winning for one of the data sets.

The Winner's Curse, Reserve Prices, and Endogenous Entry: Empirical Insights from eBay Auctions

Internet auctions have recently gained widespread popularity and are one of the most successful forms of electronic commerce. We examine a unique data set of eBay coin auctions to explore the determinants of bidder and seller behavior. We begin by documenting a number of empirical regularities in our data set of eBay auctions. Next, we specify and estimate a structural econometric model of bidding on eBay. Using our parameter estimates from this model, we measure the extent of the winner’s curse and simulate seller revenue under different reserve prices.

Does a Seller’s eCommerce Reputation Matter? Evidence from eBay Auctions

With internet commerce, a buyer cannot directly examine the product and so must rely upon the accuracy and reliability of the seller in deciding whether and how much to bid. In this setting, the seller’s reputation can become an important factor in the bid. This paper examines the impact of the seller’s reputation on the willingness of buyers to bid on items sold via internet auctions, using a 1999 mint condition U.S. $5 gold coin whose average price was $32.73. The empirical results show that the seller’s reputation has a positive, statistically significant, but small impact on the price.

Reputation and e-commerce: eBay auctions and the asymmetrical impact of positive and negative ratings

This analysis explores the impact and nature of reputation as related to e-commerce by looking at the importance of a seller’s reputational rating on the final bid price associated with eBay auctions. Positive reputational ratings emerged as mildly influential in determining final bid price. However, negative reputational ratings emerged as highly influential and detrimental. Thus, we find strong evidence for the importance of reputation when engaging in e-commerce and equally strong evidence concerning the exaggerated influence of negative reputation.

Reputation and e-commerce: eBay auctions and the asymmetrical impact of positive and negative ratings

This analysis explores the impact and nature of reputation as related to e-commerce by looking at the importance of a seller’s reputational rating on the final bid price associated with eBay auctions. Positive reputational ratings emerged as mildly influential in determining final bid price. However, negative reputational ratings emerged as highly influential and detrimental. Thus, we find strong evidence for the importance of reputation when engaging in e-commerce and equally strong evidence concerning the exaggerated influence of negative reputation.

Winner's Curse, Reserve Prices and Endogenous Entry: Empirical Insights from eBay Auctions

Internet auctions have recently gained widespread popularity and are one of the most successful forms of electronic commerce. We examine a dataset of eBay coin auctions to explore features of online bidding and selling behavior. We find that profit margins for bidders are slim on average, that previous experience does not play a significant role in observed bidding behavior and that bidding activity is concentrated at the end of the auction. We then develop new econometric techniques to estimate a structural model of bidding to address three main issues. First, we measure the extent of the winner's curse. We find that for a representative auction in our sample, a bidder's expected profits fall by 3.2 percent when the expected number of bidders increases by one. Second, we document that costly entry is a key component in understanding observed bidding behavior. For a representative auction in our sample, a bidder requires $3.20 of expected profit to enter the auction. Third, we study the seller's choice of reserve prices. We find that items with higher book value tend to be sold using a secret reserve price with a low minimum bid. We find that this is, to a first approximation, consistent with maximizing behavior.