Public Versus Secret Reserve Prices in eBay Auctions: Results of Pok�mon Field Experiment

Rama Katkar () and David Reiley ()
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Rama Katkar: Northwestern University

No 26, Vanderbilt University Department of Economics Working Papers from Vanderbilt University Department of Economics

Abstract: Sellers in eBay auctions have the opportunity to choose both a public minimum bid amount and a secret reserve price. We ask, empirically, whether the seller is made better or worse off by setting a secret reserve above a low minimum bid, versus the option of making the reserve public by using it as the minimum bid level. In a field experiment, we auction 50 matched pairs of Pok�mon cards on eBay, half with secret reserves and half with equivalently high public minimum bids. We find that secret reserve prices make us worse off as sellers, by reducing the probability of the auction resulting in a sale, deterring serious bidders from entering the auction, and lowering the expected transaction price of the auction.

Date: 2000-07
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Persistent link: https://EconPapers.repec.org/RePEc:van:wpaper:0026

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