Would you like to go on an Internet auction site and know how much to bid for a certain item -- and also know that you didn't overpay for that item? How about when you sell an item in an online auction: Would you like to know what price to set that ensures you don't leave money on the online table?
Wharton marketing and statistics professor Eric T. Bradlow can't provide specific answers. But he does offer guidance on the behavior of potential buyers in a new study entitled, "An Integrated Model for Bidding Behavior in Internet Auctions: Whether, Who, When, and How Much," recently published in the Journal of Marketing Research. Bradlow, who is also academic director of the Wharton Small Business Development Center, co-authored the study with Cornell marketing professor Young-Hoon Park. "To the best of our knowledge, this is the first attempt to model formally the behavioral aspects of bidding behavior for the entire sequence of bids in Internet auctions," the authors write.
Bradlow and Park base their research on a unique set of data. One of the largest Internet auction sites in Korea provided them with information on the auctions of notebook computers from July 2001 to October 2001. The paper includes a description of the computational approach for the integrated model. "What any person who wanted to use the model would need," says Bradlow, "is a complete history of bids as the auction is going along. This can be gotten from the site itself, as in our case, or technologically sophisticated people can themselves write programs to collect this data in real time."
As for the rest of us, the research provides intriguing insights into how Internet auctions work and how we can be more successful buyers or sellers. For example, information that may help refine buying strategy includes:
- Bidding timing: Bidding activity is concentrated at the end of each auction, the research suggests.
[continue]
Page 1 of 6 > >>