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Individual bidder behaviour in repeated auctions

Author

Listed:
  • Waterson, Michael

    (University of Warwick)

  • Wojciechowska , Olga

Abstract

We examine bidders’ behaviour in auction sales of the iPhone4 on eBay in the context of a significant shortage of the product at listed price, leading to achieved prices significantly above the posted price, on average. We examine the behaviour of sellers then test the direct prediction of the successive auctions model that bidders increase their bids over successive auctions and are influenced by the effects of information gained from previous auctions, finding that bidders indeed react both to their direct experience and to experience gained from studying previous auctions. In addition, the results are suggestive of bidders being reluctant to reveal their true valuation of the product initially but that they do so only over time. Our results are novel in being able to track individual bidders’ behaviour rather than simply auction outcomes.

Suggested Citation

  • Waterson, Michael & Wojciechowska , Olga, 2024. "Individual bidder behaviour in repeated auctions," The Warwick Economics Research Paper Series (TWERPS) 1498, University of Warwick, Department of Economics.
    • Handle: RePEc:wrk:warwec:1498
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    File URL: https://warwick.ac.uk/fac/soc/economics/research/workingpapers/2024/twerp_1498_-_waterson.pdf
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    References listed on IDEAS

    as
    1. Bernhardt, Dan & Scoones, David, 1994. "A Note on Sequential Auctions," American Economic Review, American Economic Association, vol. 84(3), pages 653-657, June.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Repeated auctions ; eBay ; consumer valuations JEL Codes: L63 ; L81 ; D12 ; D44;
    All these keywords.

    JEL classification:

    • L63 - Industrial Organization - - Industry Studies: Manufacturing - - - Microelectronics; Computers; Communications Equipment
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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