Work detail

Price Determinants and Bidding Strategies in Internet Auctions

Author: Bc. Barbora Máková
Year: 2012 - summer
Leaders: doc. PhDr. Martin Gregor Ph.D.
Consultants:
Work type: Bachelors
Language: English
Pages: 108
Awards and prizes: B.A. with distinction from the Dean of the Faculty of Social Sciences for an extraordinarily good bachelors diploma thesis.
Link:
Abstract: This paper presents an empirical analysis of price determinants and bidders’
behaviour in on-line auctions eBay.de and Aukro.cz. We focus on the effect
of sellers’ feedback rating score and the phenomenon of sniping. Our dataset
used for the analysis consists of 7054 auctions with 209449 bids from eBay,
and 2223 auctions with 8779 bids from Aukro. Buyers in on-line auctions
cannot personally inspect the quality of the product, so they have to rely
on the seller’s honesty. In this setting, the seller’s rating may significantly
contribute to the final price formation. Sniping is a bidding strategy, whereby
a bidder waits until the last moment of the bidding period to place her bid.
According to a theory, sniping should cause a reduction in the final price, and
there should be a positive relationship between the probability of bidding and
bidder’s experience. The empirical results for both auction web sites show that
the seller’s feedback rating score has a significant impact on the final price. The
tests regarding sniping provide distinctive results only for eBay. The effect of
sniping on the final price is not clear since we have obtained different results for
different specifications, but we found out that experience of a bidder increases
the probability of placing a sniping bid.
Downloadable: Bachelor Theses of Makova

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