Competition, endogeneity and the winning bid: An empirical analysis of eBay auctions

Ilke Onur, Malathi Velamuri

Research output: Contribution to journalArticlepeer-review

Abstract

Using a dataset of Texas Instruments (TI) calculator auctions on eBay, we estimate the impact of the number of bidders on the winning bid. We highlight the possible endogeneity associated with using the number of observed bidders. We tackle this problem by employing approaches involving instrumental variables. We introduce a novel instrumental variable, the closing interval between successive auctions. Estimates from the two-stage least squares (2SLS) regression are over three times those from an ordinary least squares (OLS) regression.

Original languageEnglish
Pages (from-to)68-74
Number of pages7
JournalInformation Economics and Policy
Volume26
Issue number1
DOIs
Publication statusPublished - Mar 2014
Externally publishedYes

Keywords

  • EBay
  • Endogeneity
  • Online auctions

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