Impact of ending rules in online auctions: The case of Yahoo.com

Ilke Onur; Kerem Tomak

doi:10.1016/j.dss.2006.03.010

Impact of ending rules in online auctions: The case of Yahoo.com

Ilke Onur, Kerem Tomak

Research output: Contribution to journal › Article › peer-review

9 Citations (Scopus)

Abstract

This paper examines the impact of sellers' choice of auction parameters on the level of their revenues using data from Yahoo.com's Playstation 2 system auctions. Our study specifically highlights the impact of the ending rule. We introduce a new variable called Winning Bid Ratio (WBR), and use it as a proxy for seller revenues. WBR is the ratio of the winning bid of an auction to the buy price offered by the seller. We find that choosing a high bid increment and including a shipping price decreases the WBR. Alternatively, lower number of bids and choosing a shorter auction length have a positive effect on the WBR. On the whole, the ending rule has a negative effect on the WBR, which is in accord with the theoretical predictions in the literature. However, we also find variations in the results for the effect of ending rule when we divide the data into two groups consisting of high and low-value auctions.

Original language	English
Pages (from-to)	1835-1842
Number of pages	8
Journal	Decision Support Systems
Volume	42
Issue number	3
DOIs	https://doi.org/10.1016/j.dss.2006.03.010
Publication status	Published - Dec 2006
Externally published	Yes

Keywords

Auction ending rules
Electronic markets
Online auctions

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10.1016/j.dss.2006.03.010Licence: In Copyright

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abstract = "This paper examines the impact of sellers' choice of auction parameters on the level of their revenues using data from Yahoo.com's Playstation 2 system auctions. Our study specifically highlights the impact of the ending rule. We introduce a new variable called Winning Bid Ratio (WBR), and use it as a proxy for seller revenues. WBR is the ratio of the winning bid of an auction to the buy price offered by the seller. We find that choosing a high bid increment and including a shipping price decreases the WBR. Alternatively, lower number of bids and choosing a shorter auction length have a positive effect on the WBR. On the whole, the ending rule has a negative effect on the WBR, which is in accord with the theoretical predictions in the literature. However, we also find variations in the results for the effect of ending rule when we divide the data into two groups consisting of high and low-value auctions.",

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Impact of ending rules in online auctions: The case of Yahoo.com

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