Start Date
12-13-2015
Description
An item offered in the buy-it-now offer (BINO) format is sold to the first consumer who is willing to pay the asked price. The "lifetime" of a BINO, therefore, depends on how many consumers are interested in the item and on how much they value it. In this paper, we model this dependency by combining survival analysis and auction theory. Our model enables sellers to quantify consumer interest and consumer valuation for their items from observing BINO lifetimes only. Further, the influence of covariates (e.g., the item condition) can be investigated. To demonstrate this, we apply our model to a dataset that we have collected from eBay. The dataset consists of 1,821 BINOs of a single product, the iPhone 5S. For this example, we find a new item to attract, on average, 1.26 consumers per day, who have a mean valuation of 384.97 EUR.
Recommended Citation
Winter, Patrick, "Quantifying Consumer Interest and Consumer Valuation from Buy-It-Now Offers" (2015). ICIS 2015 Proceedings. 6.
https://aisel.aisnet.org/icis2015/proceedings/eBizeGov/6
Quantifying Consumer Interest and Consumer Valuation from Buy-It-Now Offers
An item offered in the buy-it-now offer (BINO) format is sold to the first consumer who is willing to pay the asked price. The "lifetime" of a BINO, therefore, depends on how many consumers are interested in the item and on how much they value it. In this paper, we model this dependency by combining survival analysis and auction theory. Our model enables sellers to quantify consumer interest and consumer valuation for their items from observing BINO lifetimes only. Further, the influence of covariates (e.g., the item condition) can be investigated. To demonstrate this, we apply our model to a dataset that we have collected from eBay. The dataset consists of 1,821 BINOs of a single product, the iPhone 5S. For this example, we find a new item to attract, on average, 1.26 consumers per day, who have a mean valuation of 384.97 EUR.