Focusing on Demand: Using Ebay Data to Analyze the Demand for Telescopes

Abstract

This paper analyzes the value of using data from on-line auctions to determine product market definitions and competitive effects of mergers. Traditionally this type of demand analysis has been based on retail transaction data, particularly "scanner" data. However, such data is not always readily available and may be difficult to interpret. Auction data, particularly data from on-line auctions like eBay may be easy to access and may be much easier to interpret. The authors analyze data from a series of auctions for 3 different types of telescopes, held over a 8 week period. The results suggest that the demand for telescopes is very elastic and that the two types of telescope designs (the Schmidt-Cassegrain and the Maksutov-Cassegrain designs) are in different product markets, supporting a position taken by the Commission in a recent case.

Keywords: Estimate Demand, On-line, Auctions

JEL Classification: D12, D44, L41, L68