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.
Recommended Citation
Muthitacharoen, Achita (Mi), "The Hidden Effects of Opening Bids in Online Auctions" (2012). ICIS 2012 Proceedings. 83.
https://aisel.aisnet.org/icis2012/proceedings/ResearchInProgress/83
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.