The Impact of Online Auction Duration

Ernan Haruvy and Peter Popkowski Leszczyc

Decision Analysis, 2010, vol. 7, issue 1, 99-106

Abstract: One view regarding auction duration suggests that longer auctions would result in more bidders and more bids, which in turn would result in higher prices. An opposing view is that shorter auctions might appeal to impatient bidders, or alternatively, that shorter duration might lead to more competitive dynamics. To examine these competing notions, we conduct pairwise comparisons of simultaneous auctions identical in all but duration. The auctions are conducted on two different platforms---eBay and a local auction site. We find that in eBay auctions, longer duration increases the number of bidders and bids, and consequently increases final prices by about 11%. On the local auction website, with far fewer auctions and a more steady set of participants, the effect is reversed, and shorter auctions generate higher prices by about 20%. Both sets of effects are robust and significant. We look at bidding activity on both sites to try to get at the root of that reversal. We find that in eBay auctions, the higher price in the longer-duration auction is accompanied by a higher number of participating bidders and a higher number of bids placed in the auction. In the local site, we find that the auction duration does not significantly affect the number of participating bidders or the number of bids placed in an auction. However, the magnitude of jump bids is negatively and significantly correlated with duration. These jump bids are in turn shown to impact final prices.

Keywords: auctions; field experiments; duration; frenzy; jump bids (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (23)

Downloads: (external link)
http://dx.doi.org/10.1287/deca.1090.0149 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:ordeca:v:7:y:2010:i:1:p:99-106

Access Statistics for this article

More articles in Decision Analysis from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().