THE DETERMINANTS OF PRICE IN ONLINE AUCTIONS: MORE EVIDENCE FROM QUANTILE REGRESSION

Chia-Hung D. Sun, Yi-Bin Chiu and Ming-Fei Hsu

Bulletin of Economic Research, 2016, vol. 68, issue 3, 268-286

Abstract: type="main">

This study explores how seller reputations affect auction prices and concludes that earlier findings may be biased due to the misspecification of seller reputation. This paper contributes to the literature by offering significant empirical evidence using Taiwanese internet auction data. Our study reveals that the influence of seller reputations on auction prices is significant, irrespective of the assumptions of linear or non-linear relationships with price. However, failure to consider the non-linear setting of seller reputation leads us to underestimate the impact of reputation when the seller's reputation score is low, but overestimates it when the seller's reputation becomes high. Using quantile regression, this study finds evidence of considerable differences in their impact on auction prices that are dependent on the distribution of price levels.

Date: 2016
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