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Competition, endogeneity and the winning bid: An empirical analysis of eBay auctions

Ilke Onur () and Malathi Velamuri

Information Economics and Policy, 2014, vol. 26, issue C, 68-74

Abstract: Using a dataset of Texas Instruments (TI) calculator auctions on eBay, we estimate the impact of the number of bidders on the winning bid. We highlight the possible endogeneity associated with using the number of observed bidders. We tackle this problem by employing approaches involving instrumental variables. We introduce a novel instrumental variable, the closing interval between successive auctions. Estimates from the two-stage least squares (2SLS) regression are over three times those from an ordinary least squares (OLS) regression.

Keywords: Online auctions; eBay; Endogeneity (search for similar items in EconPapers)
JEL-codes: D44 C36 (search for similar items in EconPapers)
Date: 2014
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DOI: 10.1016/j.infoecopol.2013.11.003

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