Start Date

14-12-2012 12:00 AM

Description

Auction opening bid is one of the online auction features that can be manipulated to promote bidding activity. Oftentimes, auction sellers that expect high bidding volume set their opening bids low only to later realize a lower price premium in their auctions. The current study offers explanations to this phenomenon by approaching this situation in a more holistic way. It examines the impacts of auction opening bids on bidding behaviors. Auction data from eBay were collected and separated into two samples, including auctions with low and high opening bids (LOB and HOB auctions). We found that HOB auctions attracted more serious bidders as indicated by their commitment to stay longer in the auctions. We also found that some bidding strategies that were commonly considered undesirable by auction sellers produced positive price premium to HOB auctions but not to its counterparts. Theoretical and pragmatic implications are later offered in the study.

Share

COinS
 
Dec 14th, 12:00 AM

The Hidden Effects of Opening Bids in Online Auctions

Auction opening bid is one of the online auction features that can be manipulated to promote bidding activity. Oftentimes, auction sellers that expect high bidding volume set their opening bids low only to later realize a lower price premium in their auctions. The current study offers explanations to this phenomenon by approaching this situation in a more holistic way. It examines the impacts of auction opening bids on bidding behaviors. Auction data from eBay were collected and separated into two samples, including auctions with low and high opening bids (LOB and HOB auctions). We found that HOB auctions attracted more serious bidders as indicated by their commitment to stay longer in the auctions. We also found that some bidding strategies that were commonly considered undesirable by auction sellers produced positive price premium to HOB auctions but not to its counterparts. Theoretical and pragmatic implications are later offered in the study.