Bid early and get it cheap - Timing effects in Internet auctions

Jens-Martin Bramsen ()

MPRA Paper from University Library of Munich, Germany

Abstract: Most internet auction sites, like eBay, use a proxy bidding system where bidders can put in their maximum bid and let a proxy bidder (a computer) bid for them. Yet many bidders speculate about how to bid and employ bidding strategies. This paper examines how the timing of bids can affect the final price. In a unique data set of 17,000 Scandinavian furniture auctions it turns out that early price increases, i.e. much early bidding, scare off bidders and therefore result in lower prices, whereas much late bidding results in higher prices. Sniping is therefore not a successful strategy to avoid bidding wars.

Keywords: Internet auctions; Auction fever; Pseudo-endowment; Bidding behavior; eBay; Strategies; WTP (search for similar items in EconPapers)
JEL-codes: D12 D4 D44 (search for similar items in EconPapers)
Date: 2008-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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