online auctions

horse auctions online



Car Auctions Online Free
Horse Auctions Online
Online Tack Auctions
Free Online Car Auctions
Online Antique Auctions


Online Auctions
Ultima Online Auctions
Online Surplus Auctions
Auction Online Auctions
Online Police Auctions
Online Craft Auctions
Live Online Government Car Auctions
Online Auctions Like Ebay
Uk Online Car Auctions
Curio And Relic Online Auctions
Online Auctions Arizona Are They Illegal
Online Jewelry Auctions
Amazon Online Auctions
Make Money Guaranteed Online Auctions
Online Doll Auctions
Web Server Hosting Online Auctions Paypal
Firearm Auctions Online
Bay Online Auctions
Car Auctions Online Free
Online Auctions For Laptops



.Horse Auctions Online

Please enjoy our collection of articles on Online Auctions

Starting Low And Ending High In Ebay Online Auctions
It is the often said that 0.99 no reserve auction are the best way to encourage bids and lead to higher prices. In fact Auctioning4u eBay Drop Off Shop lists most of its items using this pricing strategy. However up to now this theory was more anecdotal than based on actual data.A recent paper by Gillian Ku of London Business School, Starting Low but Ending High: A Reversal of the Anchoring effect in Auctions has investigated the effect of starting price on the final value of online auctions and discovered that it is indeed the case that low starting prices increase ending price. Ku et al have discovered that three effects of lower starting prices lead to higher ending prices: * Lower starting prices reduce barriers to entry, which increases bids and generates higher prices * Lower starting prices entice bidders to invest time and energy, increasing their commitment to the auction * The extra bids generated by lower starting prices infer value in the item, encouraging more trafficThese findings are at odds with previous research on negotiations which finds that ending prices were highly related to starting price. In the more social environment of auctions (especially online auctions such as eBay), this trend is reversed. Ku performed six studies to investigate the effect of starting price on ending price, several of which were related to eBay (these are studies 2, 3 and 5 detailed below).Study 2: Starting low and ending high on eBayThe results of eBay online auctions were analysed to establish the relationship between staring and ending prices. For this study, two types of auctions were identified: * Independent value auctions. These are highly individual auctions where the price is difficult to predict e.g. collectibles * Common value auctions. Auctions of common items where there is a market price.For the independent value auctions they choose to analyse Tabriz Persian rugs and for the common value auctions Nikon digital cameras. The following results were found for both types of auction * Lowers starting price auctions were more likely to be successful * Lowers starting prices auction results in more bids and more unique bidders. * Lower staring prices resulted in higher ending pricesStudy 3: Escallation of Commitment on eBayThis study set out to investigate the effect of escalation of commitment on prices rises. Is it the case that once the bidder has placed a


bid they have invested time and are more likely to bid again?Ku et al focused their attention on a particular eBay seller, Browncow, who sells Hawaiian shirts starting at $9.99 and $24.99. Analysing the results of 89 auction produced the following conclusions * Low staring prices bring bidders into the auction early * Low starting prices encourage bidders to accumulate sunk costs into the auction. Low starting price winners have spend more time in the auction and make more bids than low starting price losers or bidders in high starting price auctions.Study 4 Inferring value from Traffic and Current PricesTest subjects were asked to judge the proper value of an mocked-up eBay item (holiday package) with which they were presented. It was found that the number of bids which the items had lead to higher valuations.Study 5 Starting Low and Ending Low on eBayThis study found that for auctions where there were less bids, the starting price did have an effect on ending price. By comparing the outcome of similar items where there were misspellings in the titles, it was found that this created a barrier to auction traffic, reducing final pricesLessons from researchThe results of this research will not come as much of a surprise to eBayers, but it is nevertheless interesting to have analysis to back up commonly quoted conceptions. I think that the following lessons can be drawn from the paper: * 0.99 NR auctions work well for popular items with plenty of search traffic and lead to higher prices * Less popular items (rare) are not suitable for this kind of auction strategy.I think that the results of this research are most relevant to individual sellers, selling in low volumes with using simple sales strategies. When selling in large volumes, the market prices will drop if too many items are listed and it is therefore necessary to increase starting prices or use fixed price auctions to compensate.Comments on the ResearchThere are many factors affecting the ending prices of "eBay Online Auctions" such as starting time, ending time, seller feedback, postal rate etc. There is no indication in this paper that these factors have been taken into account.The paper talks about auction traffic, referring to the number of bids on an item. I think that another interesting study would be to compare the number of views of an auction with starting price to establish if there is a relationship.




All content published on this web site is provided for informational and educational purposes only. Always seek professional advice before making any decisions.

We use third-party advertising companies to serve ads when you visit our website. These companies may use information (not including your name, address, email address, or telephone number) about your visits to this and other websites in order to provide advertisements about goods and services of interest to you. If you would like more information about this practice and to know your choices about not having this information used by these companies, click here.

This page was updated on May 2009 and is Copyright © 2003 by Global Com Consulting Inc.