Jump Bidding in Online Auctions: An in Vivo Experiment

32 Pages Posted: 25 Nov 2021

See all articles by Joyce Delnoij

Joyce Delnoij

Wageningen University & Research - Section Economics

Sarah Rezaei

affiliation not provided to SSRN

Arnout van de Rijt

affiliation not provided to SSRN

Abstract

One feature of online auctions that has attracted much interest is jump bidding, whereby a bidder raises the price by more than what is needed to become the highest bidder. The effects of jump bidding on the final price remain unclear. Our study involves an in vivo experiment during live auctions on a large online auction platform. We intervened early in auctions at low, non-competitive price levels, either through jump bidding or through incremental bidding, and randomly varied the magnitude of our intervention. We find no effect of jump bidding on the final price. However, we find that smaller jump bids lowered the final price vis-à-vis no intervention or an incremental bid, while larger jump bids increased it. We conjecture that uncertainty about an item's value leads bidders to gauge it from the size of other bidders' jump bids.

Keywords: Jump bidding, Online auction, Field experiment

Suggested Citation

Delnoij, Joyce and Rezaei, Sarah and van de Rijt, Arnout, Jump Bidding in Online Auctions: An in Vivo Experiment. Available at SSRN: https://ssrn.com/abstract=3971478 or http://dx.doi.org/10.2139/ssrn.3971478

Joyce Delnoij (Contact Author)

Wageningen University & Research - Section Economics ( email )

P.O. Box 8130, 6700 EW Wageningen
Netherlands

Sarah Rezaei

affiliation not provided to SSRN ( email )

No Address Available

Arnout Van de Rijt

affiliation not provided to SSRN ( email )

No Address Available

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
25
Abstract Views
173
PlumX Metrics