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The Seller's Listing Strategy in Online Auctions: Evidence from Ebay

28 Pages Posted: 14 Feb 2012 Last revised: 13 May 2012

Kong-Pin Chen

Academia Sinica - Research Center for Humanities and Social Sciences; National Taiwan University - Department of Economics

Yu-SHeng Liu

Research Center for Humanities and Social Sciences

Ya-Ting Yu

Graduate Institute of Industrial Economics

Date Written: January 16, 2012

Abstract

The paper empirically studies why the sellers of identical commodities adopt different auction formats in the online auction, and the consequences thereof. We postulate that the sellers adopt different auction formats because of the differences in their experience and the number of items they have. We first use these two characteristics to endogeneize the seller's choice between three auction formats: fixed-price, buy-it-now (BIN), and pure auctions. We then estimate the differences in sales rate, transaction price, and sale duration between the three formats. We find that the fixed-price auction 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 tradeoff between price and sale probability in adopting different formats of auctions.

Keywords: online auctions, eBay, fixed-price sale, buy-it-now, second-price auction, reputation, experience, selling format

JEL Classification: D44

Suggested Citation

Chen, Kong-Pin and Liu, Yu-SHeng and Yu, Ya-Ting, The Seller's Listing Strategy in Online Auctions: Evidence from Ebay (January 16, 2012). Available at SSRN: https://ssrn.com/abstract=2004814 or http://dx.doi.org/10.2139/ssrn.2004814

Kong-Pin Chen (Contact Author)

Academia Sinica - Research Center for Humanities and Social Sciences ( email )

RCHSS
Academia Sinica
Nankang, Taipei, 11529
Taiwan
886 2 2789 8160 (Phone)
886 2 2785 4160 (Fax)

HOME PAGE: http://idv.sinica.edu.tw/kongpin/

National Taiwan University - Department of Economics

21 Hsiu Chow Rd
Taipei, 10020
Taiwan

Yu-SHeng Liu

Research Center for Humanities and Social Sciences ( email )

Nankang
Taipei, 11529
Taiwan

Ya-Ting Yu

Graduate Institute of Industrial Economics ( email )

No. 300, Zhongda Road
Chung-Li Taiwan, 32054
Taiwan

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