Revenue non-equivalence between auctions with soft and hard closing mechanisms: New evidence from Yahoo!

Brent Glover and Yaron Raviv ()

Journal of Economic Behavior & Organization, 2012, vol. 81, issue 1, 129-136

Abstract: We use a unique dataset to examine the revenue differences between auctions with a hard-close ending rule versus those with a soft-close ending rule. We find that selling items using the soft-close rule increases the selling price by an amount between $25 and $44 (or 13–20 percent) over the hard-close format. One possible theoretical explanation for these results is that the hard-close ending rule accommodates the practice of sniping, which leads to a lower expected selling price. We find empirically that a lack of experience could help to explain why, in spite of the revenue differences, some sellers select the hard-close ending rule.

Keywords: Auctions; Sniping; Ending rules (search for similar items in EconPapers)
JEL-codes: D44 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (10)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:81:y:2012:i:1:p:129-136

DOI: 10.1016/j.jebo.2011.09.003

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