Risk-Reducing And Risk-Enhancing Factors Impacting Online Auction Outcomes: Empirical Evidence From eBay Auctions

Author: 

Eugene M. Bland
Gregory S. Black
Kay Lawrimore

Abstract: 

This research investigates eBay auction features that influence auction outcomes: likelihood of transaction or whether the item was actually sold in the auction (auction success) and value of the last bid (auction effectiveness). Specifically, we study several seller options available to the seller to increase the final price and successful end to the auction. We investigate the effectiveness of the term “New In Box” in the auction’s heading, the use of an actual or cut picture, the initial price set by the seller, use of a reserve price and acceptance of a credit card in increasing the likelihood of the auction ending successfully, and at increasing the final price. Along with other independent variables, the impact of factors dealing with the auction pictures is examined. Hundreds of auctions (423) for two financial calculators were examined in this study. Findings show that utilization of certain risk-reducing auction features positively influence outcomes of these eBay auctions. These features include level of the starting bid, mention of “New in Box,” inclusion of a real picture of the unit being sold, and the inclusion of a stock picture. In addition, findings indicate that certain risk-enhancing auction features negatively influence eBay auction outcomes. These features include the presence of a reserve price and the mention of “Wear” in the auction.

Key Word: 

Published Date: 

November, 2007

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