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THE BEHAVIOR OF INEXPERIENCED BIDDERS IN INTERNET AUCTIONS
Author(s) -
LIVINGSTON JEFFREY A.
Publication year - 2010
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.2008.00128.x
Subject(s) - common value auction , unique bid auction , reputation , bid shading , english auction , microeconomics , vickrey–clarke–groves auction , proxy bid , the internet , business , vickrey auction , economics , advertising , computer science , auction theory , world wide web , social science , sociology
In Internet auctions, bidders alter their strategies as they gain market experience. While inexperienced bidders bid the same high amounts regardless of the seller’s reputation, experienced bidders bid substantially less if the seller has yet to establish a reputation and raise their bids as reports are filed that the seller has treated bidders well in the past. Experienced bidders also wait until much closer to the end of the auction to place their bids, although it takes very little experience to learn that waiting to submit one’s bid is a superior strategy. ( JEL L14, L15, D83, D12)