Does Higher Transparency Lead to More Search in Online Auctions?
University of Texas at Dallas - Naveen Jindal School of Management
Peter T. L. Popkowski Leszczyc
University of Alberta - Department of Marketing, Business Economics & Law
February 2, 2012
Production and Operations Management, Forthcoming
In a controlled field experiment, we examine pairs of auctions for identical items under different conditions. We find that auction design features that are under the control of the auctioneer - including information transparency, number of simultaneous auctions, and the degree of overlap between simultaneous auctions - affect bidder search and choice. Clickstream data show that a significant relationship between information transparency and price dispersion can be linked to search. Specifically, the effect of information transparency on price dispersion is fully mediated by lookup behavior. Combining these findings, we make auction design recommendations regarding the provision of product and value information.
Number of Pages in PDF File: 35
Keywords: Auctions, field experiments, search, clickstream data
JEL Classification: C93, D12, D44, D83, M30, M34
Date posted: February 25, 2012