Investigating buyer and seller strategies in online auctions

Abstract

The annual turnover of online auctions is already in tens of billions of dollars and this amount is predicted to grow substantially over the next few years. Hence, it is important to know how buyers and sellers can influence their chances of success. Therefore, data were collected from eBay auctions for three different categories of collectible items, namely those with a published guide price, those with a rough guide price and those having no easily obtainable guide price. The options available to buyers and sellers of items were then analysed. It was found that it was hard for the seller to influence an item's achieved price significantly, apart from items with no guide price where the starting price could have an effect. Most bidders bid close to the current value and so there were insufficient data to determine the consequences of timing on the placing of high bids. For low bids, delaying a bid was found to improve significantly the chances of winning for one of the data sets.

Keywords:

• online auctions
• bidding behaviour
• guide prices

Acknowledgements

This work has been greatly improved by discussions with Ben Ackroyd, Mark Brogan and David Percy, and by the comments of the referees.