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Sales Mechanisms in Online Markets: What Happened to Internet Auctions?

Liran Einav, Chiara Farronato, Jonathan Levin and Neel Sundaresan

No 19021, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: Consumer auctions were very popular in the early days of internet commerce, but today online sellers mostly use posted prices. Data from eBay shows that compositional shifts in the items being sold, or the sellers offering these items, cannot account for this evolution. Instead, the returns to sellers using auctions have diminished. We develop a model to distinguish two hypotheses: a shift in buyer demand away from auctions, and general narrowing of seller margins that favors posted prices. Our estimates suggest that the former is more important. We also provide evidence on where auctions still are used, and on why some sellers may continue to use both auctions and posted prices.

JEL-codes: D02 D43 D44 D47 D82 L13 L86 (search for similar items in EconPapers)
Date: 2013-05
New Economics Papers: this item is included in nep-com, nep-ict and nep-mkt
Note: IO PR
References: Add references at CitEc
Citations: View citations in EconPapers (31)

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