Pennies from Ebay: The Determinants of Price in Online Auctions

11 Pages Posted: 26 Jul 2007

See all articles by David Reiley

David Reiley

Pandora Media, Inc.; UC Berkeley School of Information

Doug Bryan

Knowledge Extraction Engines (KXEN)

Naghi Prasad

Turn Inc.

Daniel Reeves

Yahoo! - Yahoo! Research Labs

Abstract

This paper presents an exploratory analysis of the determinants of prices in online auctions for collectible United States one-cent coins at the eBay web site. Starting with an initial data set of 20,000 auctions, we perform regression analysis on a restricted sample of 461 coins for which we obtained estimates of book value. We have three major findings. First, a seller's feedback ratings, reported by other eBay users, have a measurable effect on her auction prices. Negative feedback ratings have a much greater effect than positive feedback ratings do. Second, minimum bids and reserve prices have positive effects on the final auction price. In particular, minimum bids appear only to have a significant effect when they are binding on a single bidder, as predicted by theory. Third, when a seller chooses to have her auction last for a longer period of days, this significantly increases the auction price on average.

Suggested Citation

Reiley, David H. and Bryan, Doug and Prasad, Naghi and Reeves, Daniel, Pennies from Ebay: The Determinants of Price in Online Auctions. Journal of Industrial Economics, Vol. 55, No. 2, pp. 223-233, June 2007. Available at SSRN: https://ssrn.com/abstract=1003036 or http://dx.doi.org/10.1111/j.1467-6451.2007.00309.x

David H. Reiley (Contact Author)

Pandora Media, Inc. ( email )

2101 WEBSTER ST 16TH FLOOR
Oakland, CA 94612
United States

UC Berkeley School of Information ( email )

102 South Hall
Berkeley, CA 94720-4600
United States

Doug Bryan

Knowledge Extraction Engines (KXEN) ( email )

201 Mission Street
Suite 1950
San Francisco, 94105-1831
United States

HOME PAGE: http://kxen.com/

Naghi Prasad

Turn Inc. ( email )

1400 Fashion Island Blvd.
San Mateo, CA
United States

HOME PAGE: http://www.turn.com/corp/index.jsp

Daniel Reeves

Yahoo! - Yahoo! Research Labs ( email )

Sunnyvale, CA 94089
United States

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