THE BEHAVIOR OF INEXPERIENCED BIDDERS IN INTERNET AUCTIONS

Jeffrey Livingston ()

Economic Inquiry, 2010, vol. 48, issue 2, 237-253

Abstract: In Internet auctions, bidders alter their strategies as they gain market experience. While inexperienced bidders bid the same high amounts regardless of the seller’s reputation, experienced bidders bid substantially less if the seller has yet to establish a reputation and raise their bids as reports are filed that the seller has treated bidders well in the past. Experienced bidders also wait until much closer to the end of the auction to place their bids, although it takes very little experience to learn that waiting to submit one’s bid is a superior strategy. (JEL L14, L15, D83, D12)

Date: 2010
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