Online Auction Sellers Research Articles

"Exploring Differences in the Decision-making Process between Online Auction Sellers and Barter Site Exchangers"

"Exploring Differences in the Decision-making Process between Online Auction Sellers and Barter Site Exchangers"

The effects of competitive reserve prices in online auctions

PurposeThis paper aims to investigate how competition among online auction sellers influences the setting of both open and secret reserve prices, thereby affecting auction outcome.Design/methodology/approachUsing a data set collected from eBay consisting of 787 identical product auctions, three empirical models have been proposed. Model 1 simultaneously estimates the effects of auction competition on a seller’s own open and secret reserve price strategies; Model 2 estimates the effects of auction competition on bidder participation; and Model 3 estimates the direct and indirect effects of auction competition on selling price.FindingsCompetition among sellers is central to shaping sellers’ reserve price strategies. When there are more concurrent auctions for identical items, sellers tend to specify a low open reserve and are less likely to set a secret reserve. Sellers are strongly influenced by competitors’ reserve price strategies, and tend to follow competition. Finally, auction competition and competitive reserve price strategies influence both bidder entry and selling prices.Practical implicationsThis study has important implications for both sellers and bidders. It highlights the importance for sellers to adapt their reserve price strategies in light of their competitors’ reserve price strategies and offers implications for bidders regarding auction selection. An auction with low starting bid does not necessarily lead to a lower selling price as it attracts more bidders.Originality/valueThis paper focuses on competition among auction sellers, whereas previous literature has focused on competition among bidders. This paper is the first to study the impact of competing reserve prices in auctions.

Online Platform Competition with Asymmetric Revenue Structures

A new online platform may only charge advertisers to compete with a leading incumbent one that collect fees from its users. When these two platforms compete with asymmetric revenue structures, the result of the competition can be different depending on several factors such as the degrees of users singlehoming, the potential market size, and the price-sensitivity of users charged by the incumbent. It is shown that unless all the users singlehome, the latecomer can overtake the incumbent when the potential market size is large or the price-sensitivity of the user group charged by the incumbent is high. This result is also consistent with the anecdotal evidences in China and the US to a degree. This study first shows that a potential market size can change the winner of the competition between an incumbent platform and a new one with asymmetric revenue structures. When one side tends to join the two platforms at a time, the latter can overtake the former if the market is not mature so that there is a room for its further growth. When Taobao started to compete with eBay China in 2003, the market itself was at an intial stage, so that Taobao could win over eBay China by not charging its sellers. On the other hand, Webstore, a free advertising-based online auction platform in the US, has been far behind eBay since its launch in 2008 was too late to change the winner of the competition. The users’ price-sensitivity also impacts the competition. Unless both buyers and sellers singlehome, if sellers are highly price-sensitive, the latecomer can win over the incumbent even when the potential market size is small. As Barnett et al. (2010) indicate, Chinese online auction sellers could have been unfamiliar with and averse to the idea of paying transaction fees. Unfortunately, eBay China adopted the policy of charging its sellers when it entered the market acquiring the leading local platform EachNet in 2003. Taobao, a small player at that time, did not impose any transaction fees on sellers and so could eventually attract more sellers than eBay China in a few years.

TV's Dirty Little Secret: The Negative Effect of Popular TV on Online Auction Sales

Timing online auctions to attract a large number of prospective buyers is important for sellers. This study examines whether online auction sellers need to account for exogenous effects like TV viewing when timing and predicting their auction results. An ongoing debate questions whether TV viewers can spread their attention across multiple devices while watching TV, for example, by concurrently shopping online or posting on social media. Recent research has focused on understanding cross-media effects; however, little attention has been given to TV viewership's relationship with a very important economic activity, namely participation in online auctions. We examine this potential cross-media effect by analyzing the four-year sales history of a German online auction platform and addressing potential endogeneity problems with an instrumental variable approach. We use three different instrumental variables that have different advantages and disadvantages but can, in sum, be used for triangulation as they lead to the same result. The analyses reveal a significant negative cross-media effect between TV consumption and online auction sales, indicating that TV consumption and online auction sales might compete for the scarce attention of consumers and are thus substitutes for each other rather than complements.

Uncertain Reasoning for Detection of Selling Stolen Goods in Online Auctions Using Contextual Information

This work describes the design of a decision support system for detection of fraudulent behavior of selling stolen goods in online auctions. In this system, each seller is associated with a type of certification, namely “proper seller,” “suspect seller,” and “selling stolen goods.” The certification level is determined on the basis of a seller’s behaviors and especially on the basis of contextual information whose origin is outside online auctions portals. In this paper, we focus on representing knowledge about sellers in online auctions, the influence of additional information available from other Internet source, and reasoning on bidders’ trustworthiness under uncertainties using Dempster-Shafer theory of evidence. To demonstrate the practicability of our approach, we performed a case study using real auction data from Czech auction portal Aukro. The analysis results show that our approach can be used to detect selling stolen goods. By applying Dempster-Shafer theory to combine multiple sources of evidence for the detection of this fraudulent behavior, the proposed approach can reduce the number of false positive results in comparison to approaches using a single source of evidence.

Photograph and model use within an online auction page for influencing buyer's bidding behavior

PurposeThis paper concentrates on the visual information within a product description block in an online auction page, which is the only place a seller can manipulate to influence bidders. The purpose of this paper is to examine the effects of photograph use, model use, and the physical attractiveness of the model on bidding behavior.Design/methodology/approachA mock online auction website was built to manipulate picture use, model use, and the physical attractiveness of the model. The experiment recruited volunteers and randomly assigned each participant into one of four treatments. After experiencing the stimulus for two minutes, the researchers asked participants to evaluate their bidding intention and write down the highest price they would bid.FindingsThe results show that using a photograph to introduce the product acquires a higher bidding intention and bidding amount than not using a photograph. In addition, a web page using physically attractive models in photographs acquires a higher bidding intention and bidding price than a web page using physically unattractive models in photographs.Originality/valueThis study is unique in discussing the effect of the visual content of the product description block on online bidding behavior. The results of this study provide suggestions and a product information presentation strategy for online auction sellers.

Maximizing willingness to bid within “Buy It Now” auctions

The present research investigates the impact of minimum starting bids and buy-it-now prices on both maximum willingness to bid and attitude toward the seller. Results from an experimental study suggest that higher minimum starting bids coupled with higher buy-it-now prices increase the maximum price that auction participants are willing to bid yet no negative impact on participants' attitude toward the seller is evidenced. These findings suggest that sellers in online auctions can receive tangible benefits (i.e., higher maximum prices that participants are willing to bid) without negative perceptual results (i.e., attitude toward the seller is not diminished) from setting the minimum starting bid higher and the buy-it-now price higher.

Key success factors for online auctions: Analysis of auctions of fashion clothing

This study presents a model for evaluating the critical successful factors of online auctions of fashion clothing to help prospective online auction sellers to develop effective online auction operation strategies. The evaluation model are generalized into four dimensions, 15 strategy subjects and 63 key performance indicators in the evaluation model. The four dimensions of the evaluation model are internet environment, customer, learning and innovation, and internal business process. An expert questionnaire is utilized to gather the opinions of scholars, online auction sellers and online auction buyers to revise the various indicators of the performance evaluation system. The analytical network process (ANP) is utilized to determine the weight of each criterion in the generation of the performance model associated with the evaluation system.

Selecting appropriate sellers in online auctions through a multi-attribute reputation calculation method

Online auctions have become immensely popular and created massive cash turnover in recent years. The volume of trade on eBay, the largest auction site in the world, reached US$6 billion in 2008. However, for a user intent on purchasing an item from an auction site, selecting an appropriate seller from the numerous choices is not an easy task. Even though most auction sites provide a concise binary reputation management mechanism to model the reputation of a trader through an integer value rating system, such a simple mechanism does not give users enough information about their potential trading partners. It is difficult to infer the right judgment rule correctly from knowledge of summing positive and negative ratings alone. We focus on developing an effective reputation model for online auctions to help users select a suitable seller. To accomplish this, four feature factors strongly related to online auction characteristics are adopted to assess the reputation of a trader. We also propose a multi-attribute reputation management (MARM) support tool to assist users in choosing sellers when using auction sites. In this research, actual transaction data collected from eBay were used to demonstrate the effectiveness of our method. Our results show that MARM is able to select more suitable sellers than other methods.

Buyer satisfaction and loyalty intention in online auctions

PurposeThe purpose of this paper is to examine the issue of the influential factors of buyer satisfaction and loyalty toward online auction web sites and online auction sellers. Customers' loyalty toward the online auction web site and seller is also explored.Design/methodology/approachAn internet survey is conducted on 221 buyers of online auction.FindingsLoyalty intention toward an online auction seller positively affects a buyer's loyalty intention toward the online auction web site, whereas his/her loyalty intention toward the online auction web site negatively affects his/her loyalty intention toward the online auction seller.Research limitations/implicationsThe first is in its cross‐sectional design. Second, this paper examines the antecedents of the online auction web site and the online auction seller in a single country. The findings may have limited generalizability to other countries.Practical implicationsThe results of this paper provide less positive news for online auction sellers. Sellers on an online auction web site should be careful in making online auction web site change decisions. Although a seller can secure buyer loyalty intention by providing strong e‐service quality, overall satisfaction and the specific asset investment (SAI), buyers still may not be enthusiastic about moving with the seller to another auction web site.Originality/valueThis paper contributes to comparing the pulling force of the web sites and the sellers, and explains that SAI can affect the buyers through web sites and sellers. There are three parties involved in the model.

Online auction service failures in Taiwan: Typologies and recovery strategies

Online auctions are a new trading model that integrates auction mechanisms and the Internet. However, during the interaction between buyers and sellers, service failures inevitably occur. When service failures occur, selecting an effective service recovery strategy to correct the failure is an important issue. In this study, 867 failure incidents from buyers of online auction service encounters are classified into eighteen categories in three main groups, and the recovery strategies are classified into 10 types. An effective strategy is also identified for each service failure. Moreover, this study proposes the “service failure severity – post-recovery repeat purchase intention matrix” to rank the service failures that should be avoided. This study can help online auction sellers understand buyer perceptions of service failure and recovery strategies to improve service quality, avoid negligence and make proper recovery decisions.

Antecedents of trust in online auctions

Customer loyalty or repeat purchasing is critical to the online auction sellers’ survival and success. Previous research has established that online repeat purchase intentions are the product of buyer assessments of trust in the online seller. Previous research has also affirmed the importance of justice perceptions in engendering trust. These perspectives, however, have been examined independently by IS and management researchers. By integrating these two perspectives, a richer understanding of buyers’ underlying beliefs and subsequent repeat purchase intentions can be gained. In the research model, bidding justice is proposed as a formative second-order construct driven by distributive justice, procedural justice, interpersonal justice, and informational justice. Bidding justice is hypothesized to positively affect trust in the community of sellers, which in turn is hypothesized to positively affect repeat purchase intentions. Data collected from 412 buyers in Yahoo-Kimo’s online auction marketplace provide support for the proposed model. The study shows that trust is a significant positive predictor of buyers’ intentions to repeat purchase. The study also shows that the four dimensions of justice are important components of bidding justice, which in turn has a strong positive effect on trust in the community of sellers. Implications for theory and practice and suggestions for future research are discussed.

Auction Characteristics and Outcomes: An Empirical Examination of eBay

ABSTRACT Internet auctions have become a major aspect of e-Commerce, and one of them, eBay, has become the world's largest person-to-person auction site. This research examines several aspects of eBay auction offerings as they relate to two auction outcomes, the number of “sold” auctions and the final closing prices. Results confirm some of the previous findings and conclusions regarding auction outcomes, but little support was found for the effects of certain auction characteristics. Suggestions for online auction sellers are provided.

When more bidders count less: item characteristics and sellers' revenue in online auctions

Recently, 'practicals' such as computers and clothes account for a substantial amount of the total volume in online auction marketplaces. However, as bidders for practicals may easily find the same goods elsewhere, it is likely that they bid less aggressively than bidders for rare items such as collectibles. We present a model that explicitly incorporates the probability of finding identical goods elsewhere. Using the model and relevant actual auction data, we show that when this probability is close either to zero or to one, an increasing number of bidders does not improve revenue as much as when it is in the middle range. We also comment on strategic implications for online auction sellers and for competing online auction marketplaces.

Recommending trusted online auction sellers using social network analysis

The reputation system currently used by major auction sites to recommend sellers is overly simple and fails to take into account the collusive attempts by some sellers to fraudulently increase their own ratings. This paper presents a recommendation system that uses trading relationships to calculate level of recommendation for trusted online auction sellers. We demonstrate that network structures formed by transactional histories can be used to expose such underlying opportunistic collusive seller behaviors. Taking a structural perspective by focusing on the relationships between traders rather than their attribute values, we use k-core and center weights algorithms, two social network indicators, to create a collaborative-based recommendation system that could suggest risks of collusion associated with an account. We tested this system against real world ''blacklist'' data published regularly in a leading auction site and found it able to screen out 76% of the blacklisted accounts. This system can provide warning several months ahead of officially released blacklists to help guard against possible seller collusion and can be incorporated into current reputation systems used to recommend trusted online auction sellers.

The usefulness of bidders’ reputation ratings to sellers in online auctions

To complement existing research showing that sellers’ reputation ratings in online auctions are extremely useful to most bidders therein, we examine current usefulness of bidders’ reputation ratings to sellers and consider how they can be made more useful. In two (briefly described) field studies, we find that even at the boundary conditions, when bidder ratings are extremely atypical and are made conveniently available, they are not used by most sellers. To make bidder reputations more useful, we propose several new measures based on relational marketing theories in consumer settings, which operationalize the relational orientation (via number and extent of multiple-transaction relationships) and the potential of bidders as relational partners (via purchase intensity, average purchase amount, bidding intensity, and bidding caution). These measures, derived from existing bidder reputation profiles, are evaluated for their discriminative value by employing a mixture modeling approach and for their predictive value by tracking a random sample of eBay bidders in a longitudinal year-long field study. We conclude with a discussion of the practical implications of our proposal for sellers, bidders, and online auctioneers.

Building Effective Online Marketplaces with Institution-Based Trust

Institution-based trust is a buyer’s perception that effective third-party institutional mechanisms are in place to facilitate transaction success. This paper integrates sociological and economic theories about institution-based trust to propose that the perceived effectiveness of three IT-enabled institutional mechanisms–specifically feedback mechanisms, third-party escrow services, and credit card guarantees–engender buyer trust in the community of online auction sellers. Trust in the marketplace intermediary that provides the overarching institutional context also builds buyer’s trust in the community of sellers. In addition, buyers’ trust in the community of sellers (as a group) facilitates online transactions by reducing perceived risk. Data collected from 274 buyers in Amazon’s online auction marketplace provide support for the proposed structural model. Longitudinal data collected a year later show that transaction intentions are correlated with actual and self-reported buyer behavior. The study shows that the perceived effectiveness of institutional mechanisms encompasses both “weak” (market-driven) and “strong” (legally binding) mechanisms. These mechanisms engender trust, not only in a few reputable sellers, but also in the entire community of sellers, which contributes to an effective online marketplace. The results thus help explain why, despite the inherent uncertainty that arises when buyers and sellers are separated in time and in space, online marketplaces are proliferating. Implications for theory are discussed, and suggestions for future research on improving IT-enabled trust-building mechanisms are suggested.

Characteristics and internet marketing strategies of online auction sellers

Internet marketing is a field that is continuing to grow, and the online auction concept may be defining a totally new and unique distribution alternative. Very few studies have examined auction sellers and their internet marketing strategies. This research examines the internet auction phenomenon as it relates to the marketing mix of online auction sellers. The data in this study indicate that, whilst there is great diversity among businesses that utilise online auctions, distinct cost leadership and differentiation marketing strategies are both evident. These two approaches are further distinguished in terms of the internet usage strategies employed by each group.

Internet auction sellers: does size really matter?

Internet marketing is a field which is continuing to grow, and the online auction concept may be defining a totally new and unique distribution alternative. Very few studies have examined auction sellers and their Internet marketing strategies. This research examines the Internet auction phenomenon as it relates to the marketing mix of online auction sellers. The data in this study indicate that, while there is great diversity among businesses that utilize online auctions, distinct cost leadership and differentiation marketing strategies are both evident. These two approaches are further distinguished in terms of the Internet usage strategies employed by each group.