Document Type



Although auctions have been an important model for price discovery on Internet, economics does not have a precise theory of auctions. Auctions raise many problems such as what types of goods will be sold by auction on Internet, and how bidders bid on Internet auction. It is curious why some newly manufactured products that are sold on the posted-price markets are also sold by auction on Internet. This paper presents a field study on Internet to investigate the differences between the bidding behavior for secondhand and newly manufactured goods. Data is collected on an open-book auction site. The results show that there were really some bidders behaved like evaluators and whether a bidder will be an evaluator or a participator is not affected by common referenced external market price. Furthermore, the prices on posted-price market may affect bids on the auction market., averaged normalized mark up of newly manufactured items were significantly larger than that of secondhand items. Implications of the findings are also discussed in this paper.