The Extent of Internet Auction Markets

Laurens de Haan, Casper de Vries and Chen Zhou ()
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Laurens de Haan: Erasmus University Rotterdam, and University of Lisbon

No 08-041/2, Tinbergen Institute Discussion Papers from Tinbergen Institute

Abstract: See also the publication in the Journal of Economic Theory .

Internet auctions attract numerous agents, but only a few become active bidders. A major difficulty in the structural analysis of internet auctions is that the number of potential bidders is unknown. Under the independent private value paradigm (IPVP)the valuations of the active bidders form a specific record sequence. This record sequence implies that if the number n of potential bidders is large, the number of active bidders is approximately 2 log n, explaining the relative inactivity. Empirical evidence for the 2 log n rule is provided. This evidence can also be interpreted as a weak test of the IPVP.

Keywords: bids as records; number of active bidders (search for similar items in EconPapers)
JEL-codes: D44 (search for similar items in EconPapers)
Date: 2008-04-17
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Persistent link: https://EconPapers.repec.org/RePEc:tin:wpaper:20080041

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