The Seller's listing strategy in online auctions: evidence from eBay
2018
The paper empirically studies why the sellers of identical commodities adopt dier-
ent auction formats in the online auction, and the consequences thereof. We postulate
that the sellers adopt dierent auction formats because of the dierences in their ex-
perience and the number of items they have. We rst use these two characteristics to
endogeneize the seller's choice between three auction formats: xed-price, buy-it-now
(BIN), and pure auctions. We then estimate the dierences in sales rate, transaction
price, and sale duration between the three formats. We nd that the xed-price auc-
tion results in the highest transaction price and the lowest sale rate, while the pure
auction is just the opposite, with the BIN auction falling in between. These results
strongly suggest that there is a tradeo between price and sale probability in adopting
dierent formats of auctions.
We
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