The Impact of Online Auction Duration

Decision Analysis, March 2010, vol. 7, no. 1 99-106

University of Alberta School of Business Research Paper No. 2013-1117

20 Pages Posted: 16 Jun 2009 Last revised: 25 Jul 2013

Ernan Haruvy

University of Texas at Dallas - Naveen Jindal School of Management

Peter T. L. Popkowski Leszczyc

University of Alberta - Department of Marketing, Business Economics & Law

Date Written: May 19, 2009

Abstract

One view regarding auction duration suggests that longer auctions would result in more bidders and more bids, which in turn would result in higher prices. An opposing view is that shorter auctions might appeal to impatient bidders, or alternatively that shorter duration might lead to more competitive dynamics. To examine these competing notions, we conduct pair-wise comparisons of simultaneous auctions identical in all but duration. The auctions are conducted on two different platforms—eBay and a local auction site. We find that in eBay auctions, longer duration increases the number of bidders and bids and consequently increases final prices by about 11%. In the local auction website with far fewer auctions and a more steady set of participants, the effect is reversed and shorter auctions generate higher prices by about 20%. Both sets of effects are robust and significant. We look at bidding activity on both sites to try to get at the root of that reversal. We find that in eBay auctions, the higher price in the longer duration auction is accompanied by a higher number of participating bidders and a higher number of bids placed in the auction. In the local site, we find that the auction duration does not significantly affect the number of participating bidders or the number of bids placed in an auction. However, the magnitude of jump bids is negatively and significantly correlated with duration. These jump bids are in turn shown to impact final prices.

Suggested Citation

Haruvy, Ernan and Popkowski Leszczyc, Peter T. L., The Impact of Online Auction Duration (May 19, 2009). Decision Analysis, March 2010, vol. 7, no. 1 99-106; University of Alberta School of Business Research Paper No. 2013-1117. Available at SSRN: https://ssrn.com/abstract=1420304 or http://dx.doi.org/10.2139/ssrn.1420304

Ernan Haruvy

University of Texas at Dallas - Naveen Jindal School of Management ( email )

P.O. Box 830688
Richardson, TX 75083-0688
United States

Peter T. L. Popkowski Leszczyc (Contact Author)

University of Alberta - Department of Marketing, Business Economics & Law ( email )

Edmonton, Alberta T6G 2R6
Canada
780-492-1866 (Phone)
780-492-3325 (Fax)

HOME PAGE: http://www.bus.ualberta.ca/ppopkowski/

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