An integrated model exploring sellers’ strategies in eBay auctions | Electronic Commerce Research Skip to main content
Springer Nature Link
Log in

An integrated model exploring sellers’ strategies in eBay auctions

  • Published:
Electronic Commerce Research Aims and scope Submit manuscript

Abstract

This paper presents the results of a field study conducted to elucidate critical factors that determine sellers’ net revenue in Internet auctions. Using two datasets of Internet auctions, one dataset for auctions of a DVD (N=378) and one for auctions of an MP3 player (N=412), we conduct multiple regression analysis to determine the impact of 10 seller-controlled variables on sellers’ net revenue. We find at least partial support for all of our 13 hypotheses.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Subscribe and save

Springer+ Basic
¥17,985 /Month
  • Get 10 units per month
  • Download Article/Chapter or eBook
  • 1 Unit = 1 Article or 1 Chapter
  • Cancel anytime
Subscribe now

Buy Now

Price includes VAT (Japan)

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

References

  1. Ba, S., & Pavlou, P.A. (2002). Evidence of the effect of trust building technology in electronic markets: price premiums and buyer behavior. MIS Quarterly, 26(3), 243–269

    Article  Google Scholar 

  2. Ba, S., Whinston, A.B., & Zhang, H. (2003). Building trust in online auction markets through an economic incentive mechanism. Decision Support Systems, 35(3), 273–286

    Article  Google Scholar 

  3. Bapna, R., Goes, P., & Gupta, A. (2000). A theoretical and empirical investigation of multi-item on-line auctions. Information Technology and Management, 1(1–2), 1–23

    Article  Google Scholar 

  4. Bapna, R., Goes, P., & Gupta, A. (2001). Insights and analyses of online auctions. Communications of the ACM, 44(11), 42–50

    Article  Google Scholar 

  5. Bapna, R., Goes, P., & Gupta, A. (2003). Analysis and design of business-to-consumer online auctions. Management Science, 49(1), 85–102

    Article  Google Scholar 

  6. Bapna, R., Goes, P., Gupta, A., & Karuga, G. (2002). Optimal design of the online auction channel: analytical, empirical, and computational insights. Decision Sciences, 33(4), 557–578

    Google Scholar 

  7. Brint, A.T. (2003). Investigating buyer and seller strategies in online auctions. Journal of the Operational Research Society, 54(11), 1177–1188

    Article  Google Scholar 

  8. Bruce, N., Haruvy, E., & Rao, R. (2004). Seller rating, price, and default in online auctions. Journal of Interactive Marketing, 18(4), 37–51

    Article  Google Scholar 

  9. Budish, E., & Takeyama, L.N. (2001). Buy prices in online auctions: irrationality on the Internet? Economics Letters, 72(3), 325–334

    Article  Google Scholar 

  10. Burke, R.R. (1997). Do you see what I see? The future of virtual shopping. Journal of the Academy of Marketing Science, 25, 352–360

    Article  Google Scholar 

  11. Cameron, D., & Galloway, A. (2005). Consumer motivations and concerns in online auctions. International Journal of Consumer Studies, 29(3), 181–193

    Article  Google Scholar 

  12. Carare, O., & Rothkopf, M. (2005). Slow Dutch auctions. Management Science, 51(3), 365–373

    Article  Google Scholar 

  13. Chong, B., & Wong, M. (2005). Crafting an effective customer retention strategy: a review of Halo effect on customer satisfaction in online auctions. International Journal of Management and Enterprise Development, 2(1), 12–26

    Article  Google Scholar 

  14. Cohen, A. (2002). Is this any place to run a business? Fortune Small Business, 12(9), 55–65

    Google Scholar 

  15. Crockett, R.O. (1999). Going, going…richer. Business Week, 3659, EB16

    Google Scholar 

  16. Dholakia, U.M. (2005). Concept discovery, process explanation, and theory deepening in e-marketing research: the case of online auctions. Marketing Theory, 5(1), 117–124

    Article  Google Scholar 

  17. Dholakia, U.M. (2005). The usefulness of bidders’ reputation ratings to sellers in online auctions. Journal of Interactive Marketing, 19(1), 31–41

    Article  Google Scholar 

  18. Dholakia, U.M., & Soltysinski, K. (2001). Coveted or overlooked? The psychology of bidding for comparable listings in digital auctions. Marketing Letters, 12(3), 225–237

    Article  Google Scholar 

  19. Ding, M., Elishaberg, J., Huber, J., & Saini, R. (2005). Emotional bidders—an analytical and experimental examination of consumers’ behavior in a priceline-like reverse auction. Management Science, 51(3), 352–365

    Article  Google Scholar 

  20. Easley, R.F., & Tenorio, R. (2004). Jump bidding strategies in Internet auctions. Management Science, 50(10), 1407–1420

    Article  Google Scholar 

  21. eBay. (2006). eBay Inc. announces fourth quarter and full year 2005 financial results. Retrieved April 3, from www.investor.ebay.com/news/Q105/ebay0420-2932ld.pdf

  22. Engelbrecht-Wiggans, R. (1980). Auctions and bidding models: a survey. Management Science, 26(2), 119–143

    Google Scholar 

  23. Geng, X., Stinchcombe, M., & Whinston, A.B. (2001). Radically new product introduction using on-line auctions. International Journal of Electronic Commerce, 5(3), 169–189

    Google Scholar 

  24. Gentry, C.R. (2003). Recycled returns. Chain Store Age, 79(1), 72–73

    Google Scholar 

  25. Geoffrion, A.M., & Krishnan, R. (2001). Prospects for operations research in the e-business era. Interfaces, 31(2), 6–36

    Article  Google Scholar 

  26. Gilkeson, J.H., & Reynolds, K. (2003). Determinants of Internet auction success and closing price: an exploratory study. Psychology & Marketing, 20(6), 537–566

    Article  Google Scholar 

  27. Gregg, D., & Walczak, S. (2003). E-commerce auction agents and online-auction dynamics. Electronic Markets, 13(3), 242–251

    Article  Google Scholar 

  28. Grow, B. (2002). Excess inventory? eBay to the rescue, Business Week, 8

  29. Hair, J.F., Anderson, R.E., Tatham, R.L., & Black, W.C. (1995). Multivariate data analysis. Upper Saddle River: Prentice-Hall

    Google Scholar 

  30. Hu, X., Lin, Z., Whinston, A.B., & Zhang, H. (2004). Hope or hype: on the viability of escrow services as trusted third parties in online auction environments. Information Systems Research, 15(3), 236–250

    Article  Google Scholar 

  31. Kagel, J.H. (1995). A survey of experimental research. In J.H. Kagel, & A.E. Roth (Eds.), The Handbook of Experimental Economics. Princeton: Princeton University Press

    Google Scholar 

  32. Kagel, J.H., & Levin, D. (2002). Bidding in common-value auctions: a survey of experimental research. Princeton: Princeton University Press

    Google Scholar 

  33. Kannan, P.K., & Kopalle, P. (2001). Dynamic pricing on the Internet: importance and implications for consumer behavior. International Journal of Electronic Commerce, 5(3), 63–83

    Google Scholar 

  34. Klemperer, P. (1999). Auction theory: a guide to the literature. Journal of Economic Surveys, 13(3), 227–286

    Article  Google Scholar 

  35. Klemperer, P. (Ed.) (2000). The economic theory of auctions. Cheltenham: Edward Elgar

    Google Scholar 

  36. Krishna, V. (2002) Auction theory. San Diego: Academic

    Google Scholar 

  37. List, J.A., & Lucking-Reiley, D., (2000). Demand reduction in multiunit auctions: Evidence from a sportscard field experiment. American Economic Review, 90(4), 961–982

    Article  Google Scholar 

  38. Lucking-Reiley, D. (1999). Using field experiments to test equivalence between auction formats: Magic on the Internet. American Economic Review, 89(5), 1063–1081

    Article  Google Scholar 

  39. Lucking-Reiley, D. (2000). Auctions on the Internet: what’s being auctioned, and how? Journal of Industrial Economics, 48(3), 227–253

    Article  Google Scholar 

  40. Lucking-Reiley, D. (2000). Vickrey auctions in practice: From nineteenth-century philately to twenty-first-century e-commerce. Journal of Economic Perspectives, 14(3), 183–193

    Article  Google Scholar 

  41. Malhotra, D., & Murningham, J.K. (2001). Milked for all their worth: competitive arousal in the Chicago cow auctions. Working paper, Kellogg Graduate School of Management, Northwestern University

  42. McAfee, R.P., & McMillan, J. (1987). Auctions and bidding. Journal of Economic Literature, 25(2), 699–739

    Google Scholar 

  43. McDonald, C.G., & Slawson, V.C. (2002). Reputation in an Internet auction market. Economic Inquiry, 40(4), 633–650

    Article  Google Scholar 

  44. Mehta, K. (2002). Understanding revenue drivers of electronic auctions. University of Illinois at Chicago, Chicago, IL

  45. Milgrom, P. (1985). The economics of competitive bidding: a selective survey in social goals and social organization. L. Hurwicz, D. Schmeidler, & H. Sonnenschein (Eds.). Cambridge: Cambridge University Press

  46. Milgrom, P. (1986). Auction theory. In T.E. Bewley (Ed.), Advances in economic theory. Cambridge: Cambridge University Press

    Google Scholar 

  47. Milgrom, P.R., & Weber, R.J. (1982). A theory of auctions and competitive bidding. Econometrica, 50(5), 1089–1122

    Article  Google Scholar 

  48. Möllenberg, A. (2004). Internet auctions in marketing: the consumer perspective. Electronic Markets, 14(4), 360–371

    Google Scholar 

  49. Muthén, L., & Muthén, B.O. (2001). Mplus: the comprehensive modeling program for applied researchers. User’s guide. Los Angeles: Muthén & Muthén

    Google Scholar 

  50. Neo, B.S. (1992). The implementation of an electronic market for pig trading in Singapore. Journal of Strategic Management Systems, 1(5), 278–288

    Article  Google Scholar 

  51. Oh, W. (2002). C2C versus B2C: a comparison of the Winner’s curse in two types of electronic auctions. International Journal of Electronic Commerce, 6(4), 115–138

    Google Scholar 

  52. Ottaway, T.A., Bruneau, C.L., & Evans, G.E. (2003). The impact of auction item image and buyer/seller feedback rating on electronic auctions. Journal of Computer Information Systems, 43(3), 56–60

    Google Scholar 

  53. Pavlou, P.A. (2002). Trustworthiness as a source of competitive advantage in online auction markets. Academy of Management Proceedings, A1–A7

  54. Porter, R., & Shoham, Y. (2004). On cheating in sealed bid auctions. Decision Support Systems, 39, 41–54

    Google Scholar 

  55. Rothkopf, M.H. (1969). A model of rational competitive bidding. Management Science, 15(7), 362–374

    Google Scholar 

  56. Rothkopf, M.H., & Harstad, R.M. (1994). Modeling competitive bidding: a critical essay. Management Science, 40(3), 364–384

    Google Scholar 

  57. Segev, A., Beam, C., & Shanthikumar, J.G. (2001). Optimal design of Internet-based auctions. Information Technology and Management, 2(2), 121–163

    Article  Google Scholar 

  58. Sinha, A.R., & Greenleaf, E.A. (2000). The impact of discrete bidding and bidder aggressiveness on sellers’ strategies in open English auctions: reserves and covert shilling. Marketing Science, 19, 244–266

    Article  Google Scholar 

  59. Spence, M. (1973). Job market signaling. Quarterly Journal of Economics, 87, 355–374

    Article  Google Scholar 

  60. Stafford, M.R., & Stern, B. (2002). Consumer bidding behavior on Internet auction sites. International Journal of Electronic Commerce, 7(1), 135–150

    Google Scholar 

  61. Standifird, S.S. (2001). Reputation and e-commerce: eBay auctions and the asymmetrical impact of positive and negative ratings. Journal of Management, 27(3), 279–295

    Article  Google Scholar 

  62. Standifird, S.S., Roelofs, M.R., & Durham, Y. (2004). The impact of eBay’s buy-it-now function on bidder behavior. International Journal of Electronic Commerce, 9(2), 167–176

    Google Scholar 

  63. Stark, R., & Rothkopf, M.H. (1979). Competitive bidding: a comprehensive bibliography. Operations Research, 27(2), 364–391

    Google Scholar 

  64. Staw, B.M. (1981). The escalation of commitment to a course of action. Academy of Management Review, 6, 577–587

    Article  Google Scholar 

  65. Subramaniam, R., Mittal, V., & Inman., J.J. (2004). Revenue equivalence in online auctions: the case of Yahoo and eBay. Advances in Consumer Research. P.T.L. Popkowski Leszczyc (Ed.)

  66. Syzmanski, D.M., & Hise, R.T. (2000). E-satisfaction: an initial examination. Journal of Retailing, 54, 34–45

    Google Scholar 

  67. van Heck, E., & van Damme, E. (1997). New entrants and the role of IT: the tele flower auctions in the Netherlands. In 30th HICSS, Hawaii

  68. van Heck, E., & Vervest, P. (1998). How should CIOs deal with Web-based auctions? Communications of the ACM, 41(7), 99–101

    Article  Google Scholar 

  69. Vickrey, W. (1961). Counterspeculation, auctions, and competitive sealed tenders. Journal of Finance, 16(1), 8–37

    Article  Google Scholar 

  70. Vincent, D.R. (1995). Bidding off the wall: why reserve prices must be kept secret. Journal of Economic Theory, 65, 575–584

    Article  Google Scholar 

  71. Vogelstein, F., Boyle, M., Lewis, P., & Kirkpatrick, D. (2004). 10 Tech trends to bet on. Fortune, 149(4), 75–81

    Google Scholar 

  72. Ward, S.G., & Clark, J.M. (2002). Bidding behavior in on-line auctions: an examination of the eBay Pokemon card market. International Journal of Electronic Commerce, 6(4), 139–155

    Google Scholar 

  73. Weick, K. (1995). What theory is not, theorizing is. Administrative Science Quarterly, 40(3), 385–390

    Article  Google Scholar 

  74. Whetten, D. (1989). What constitutes a theoretical contribution. Academy of Management Review, 14(4), 490–495

    Article  Google Scholar 

  75. Wilcox, R.T. (2000). Experts and Amateurs: the role of experience in Internet auctions. Marketing Letters, 11(4), 363–374

    Article  Google Scholar 

  76. Wilson, R.B. (1969). Communications to the editor: competitive bidding with disparate information. Management Science, 15(7), 446–449

    Article  Google Scholar 

  77. Wilson, R.B. (1987). Auction theory. The new Palgrave. In J. Eatwell, M. Milgate, & P. Newman (Eds.), A dictionary of economic theory. London: Macmillan

    Google Scholar 

  78. Wingfield, N. (2001). EBay watch: corporate sellers put the online auctioneer on even faster track—goods from IBM Disney help dot-com pioneer post a surge in profits—why mom and pop are mad. Wall Street Journal, A.1

  79. Zeithaml, V.A. (1988). Consumer perceptions of price, quality, and value: a means-ends model and synthesis of evidence. Journal of Marketing, 52, 2–22

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Rawls College of Business Administration, Texas Tech University, Lubbock, TX, 79409-2101, USA

    Jaeki Song & Jeff Baker

Authors
  1. Jaeki Song
    View author publications

    You can also search for this author inPubMed Google Scholar

  2. Jeff Baker
    View author publications

    You can also search for this author inPubMed Google Scholar

Corresponding author

Correspondence to Jaeki Song.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Song, J., Baker, J. An integrated model exploring sellers’ strategies in eBay auctions. Electron Commerce Res 7, 165–187 (2007). https://doi.org/10.1007/s10660-007-9001-x

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10660-007-9001-x

Keywords