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Seller Strategies on eBay

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  • Anderson, Steve
  • Friedman, Daniel
  • Milam, Garrett
  • Singh, Nirvikar

Abstract

This paper analyzes seller characteristics and choices in approximately 1000 eBay auctions for a particular model of PDA. Seller characteristics include frequency of selling, reputation, and the qualities of the product sold. Seller choices include the length of the auction, information provided about the product, starting price, and whether to use a ‘Buy it Now’ option. We find that different types of sellers pursue systematically different strategies for how their items are offered, and we discuss the possible causes of these differences. For example, the two high volume sellers in our sample always use a combination of a ‘Buy it Now’ with a low starting price, while the many less frequent sellers use an array of pricing strategies. In addition, more highly rated sellers were somewhat more likely to provide more detailed product information, as well as secure payment options.

Suggested Citation

  • Anderson, Steve & Friedman, Daniel & Milam, Garrett & Singh, Nirvikar, 2004. "Seller Strategies on eBay," Santa Cruz Department of Economics, Working Paper Series qt43z3965f, Department of Economics, UC Santa Cruz.
    • Handle: RePEc:cdl:ucscec:qt43z3965f
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    References listed on IDEAS

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    1. Alvin E. Roth & Axel Ockenfels, 2002. "Last-Minute Bidding and the Rules for Ending Second-Price Auctions: Evidence from eBay and Amazon Auctions on the Internet," American Economic Review, American Economic Association, vol. 92(4), pages 1093-1103, September.
    2. Steven Anderson & Daniel Friedman & Garrett Milam & Nirvikar Singh, 2004. "Buy it Now: A Hybrid Internet Market Institution," Industrial Organization 0412003, University Library of Munich, Germany.
    3. David Lucking‐Reiley & Doug Bryan & Naghi Prasad & Daniel Reeves, 2007. "Pennies From Ebay: The Determinants Of Price In Online Auctions," Journal of Industrial Economics, Wiley Blackwell, vol. 55(2), pages 223-233, June.
    4. Riley, John G & Samuelson, William F, 1981. "Optimal Auctions," American Economic Review, American Economic Association, vol. 71(3), pages 381-392, June.
    5. Dan Ariely & Axel Ockenfels & Alvin E. Roth, 2005. "An Experimental Analysis of Ending Rules in Internet Auctions," RAND Journal of Economics, The RAND Corporation, vol. 36(4), pages 890-907, Winter.
    6. McAfee R. Preston & Vincent Daniel, 1993. "The Declining Price Anomaly," Journal of Economic Theory, Elsevier, vol. 60(1), pages 191-212, June.
    7. Maskin, Eric S & Riley, John G, 1984. "Optimal Auctions with Risk Averse Buyers," Econometrica, Econometric Society, vol. 52(6), pages 1473-1518, November.
    8. David Lucking-Reiley, 1999. "Using Field Experiments to Test Equivalence between Auction Formats: Magic on the Internet," American Economic Review, American Economic Association, vol. 89(5), pages 1063-1080, December.
    9. Anderson, Steven & Friedman, Daniel & Milam, Garrett & Singh, Nirvikar, 2007. "Buy it now: A hybrid market institution," MPRA Paper 4322, University Library of Munich, Germany.
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    Cited by:

    1. Shunda, Nicholas, 2009. "Auctions with a buy price: The case of reference-dependent preferences," Games and Economic Behavior, Elsevier, vol. 67(2), pages 645-664, November.
    2. Anderson, Steve & Friedman, Daniel & Milam, Garrett & Singh, Nirvikar, 2004. "Buy it Now: A Hybrid Internet Market Institution," Santa Cruz Department of Economics, Working Paper Series qt21d715v9, Department of Economics, UC Santa Cruz.
    3. Ivanova-Stenzel, Radosveta & Kröger, Sabine, 2008. "Price formation in a sequential selling mechanism," Journal of Economic Behavior & Organization, Elsevier, vol. 67(3-4), pages 832-843, September.
    4. Anderson, Steven & Friedman, Daniel & Milam, Garrett & Singh, Nirvikar, 2007. "Buy it now: A hybrid market institution," MPRA Paper 4322, University Library of Munich, Germany.
    5. Philipp Maier, 2005. "A global village without borders? international price differentials at eBay," Proceedings, Board of Governors of the Federal Reserve System (U.S.).

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