The Choice of Opening Prices on Ebay

19 Pages Posted: 8 Jun 2009

See all articles by Mikhail Ion Melnik

Mikhail Ion Melnik

Niagara University - Commerce Department

Yongsheng Xu

Georgia State University - Andrew Young School of Policy Studies

James Alm

Tulane University


In this paper we examine the choice of the opening bid on eBay by sellers of US Morgan dollar coins. We find that the opening bid is a function of the observed characteristics of the past transaction prices for the coin, the seller's characteristics and the fee structure imposed by the auctioneer. The results demonstrate that increasing the opening bid fee structure induces a lower optimal opening bid, while an increase in the degree of risk in the price distribution increases the opening bid. These results have important implications for market structure of online auction sites.

Suggested Citation

Melnik, Mikhail Ion and Xu, Yongsheng and Alm, James, The Choice of Opening Prices on Ebay. The Manchester School, Vol. 77, Issue 4, pp. 411-429, July 2009, Available at SSRN: or

Mikhail Ion Melnik (Contact Author)

Niagara University - Commerce Department ( email )

P.O. Box 2201
Niagara University, NY 14109
United States

Yongsheng Xu

Georgia State University - Andrew Young School of Policy Studies ( email )

Department of Economics
35 Broad Street, 6th Floor Department of Economics
Atlanta, GA 30303-3083
United States

James Alm

Tulane University ( email )

United States
5048628344 (Phone)

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