Empirical Analyses of Nonlinear Effects of Reserve Prices on Ending Prices in Online Auctions
Peter Popkowski Leszczyc and
Journal of Interactive Marketing, 2021, vol. 54, issue C, 86-102
Empirical results about the effect of open reserve price on ending prices in auctions are mixed, with some researchers finding a positive effect on ending price and others reporting a negative or no effect. The objective of this research is to propose a new theoretical framework. First, without an open reserve price, auctions attract more bidders, resulting in increased competition and higher ending prices—a so-called competition effect. Second, a high open reserve price may serve as a price floor or a reference price, influencing bidders' valuations and increasing ending prices.
Keywords: Auctions; Reserve price; Quantile regression; Reference-price effect (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:joinma:v:54:y:2021:i:c:p:86-102
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