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Analyzing the Impact of Public Buyer–Seller Engagement During Online Auctions

Author

Listed:
  • Arvind K. Tripathi

    (Information Systems and Operations Management, University of Auckland Business School, University of Auckland, Auckland 1010, New Zealand)

  • Young-Jin Lee

    (Business Information and Analytics, Daniels College of Business, University of Denver, Denver, Colorado 80210)

  • Amit Basu

    (Information Technology and Operations Management, Cox School of Business, Southern Methodist University, Dallas, Texas 75275)

Abstract

Seller and product authentication problems are inherent in online markets, particularly in the time-constrained setting of online auctions. Although trust-building mechanisms such as seller feedback can mitigate these problems, they are retrospective, providing information about a transaction only after it is completed. Also, they have only indirect effects on buyers’ trust in sellers because they are not based on direct interactions between a trustor (buyer) and a trustee (seller). On the other hand, direct engagement between transacting parties during an online auction, particularly open and public engagement, reduces information asymmetry between buyers and sellers and has a direct effect on buyers’ trust. In this paper, we analyze how public buyer–seller engagement via question and answer (Q&A) during online auctions impacts bidding behavior. Analyzing auction data from a large auction platform that supports public Q&A between buyers and sellers, we show that the seller’s engagement with buyers during an auction can significantly impact the behavior of both buyers who ask questions and lurkers who passively observe the engagement (spillover effect). Our analysis also shows that the impact of the seller’s engagement depends on features such as product type and seller reputation. A key insight from our study is that the impact of seller engagement on bidding behavior is moderated by seller feedback ratings, which indicates that trust-building mechanisms in online markets interact in their effects on buyers’ decision making. As sellers gain positive (negative) feedback, the impact of buyer–seller engagement on bidding behavior increases (decreases). Furthermore, the cost of an additional negative feedback rating outweighs the benefit of a positive one. Overall, this study provides valuable insights for online auction platforms and their stakeholders.

Suggested Citation

  • Arvind K. Tripathi & Young-Jin Lee & Amit Basu, 2022. "Analyzing the Impact of Public Buyer–Seller Engagement During Online Auctions," Information Systems Research, INFORMS, vol. 33(4), pages 1264-1286, December.
    • Handle: RePEc:inm:orisre:v:33:y:2022:i:4:p:1264-1286
    DOI: 10.1287/isre.2022.1114
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