Ivanova-Stenzel, Radosveta Grebe, Tim Kröger, Sabine
Year of Publication:
Beiträge zur Jahrestagung des Vereins für Socialpolitik 2019: 30 Jahre Mauerfall - Demokratie und Marktwirtschaft - Session: Industrial Organisation - Auctions No. C21-V2
We investigate experimentally on eBay how sellers set prices in "Buy-It-Now" (BIN) auctions. We find that the eBay format leads to prices substantially below those expected in second-price auctions. Moreover, our results reveal that the information available on eBay about buyer experience and bidding behavior correlates with the observed price deviation. Sellers respond strategically to this information. More experienced sellers ask for higher BIN-prices, whereas seller risk aversion does not effect their price decisions. Compared to an eBay auction without a BIN-price, the BIN-auction is more efficient and generates significantly higher revenue.
experience online markets eBay BIN price private value experiment