Online Auctions: A Behavioral Study

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 Introduction o The rational-bidder based studies in auctions1 have been vastly investigated in 1980s and 1990s in Economy Journals. The Economists believe that the sellers prefer auctions in which the barriers of entry are rather low which would lead to higher utility for the seller (Bulow, Klemperer 2009). However, these studies are mainly focused on big-scale auctions. Big-scale auctions are the type of auctions in which bidders are large companies. On the other hand, on line auctions have properties which differentiate them from classical auctions. On line auction has become one of the most successful businesses since emergence of internet. Unlike many other web-services which lost their popularity (Ariely& Simonson 2005), even after dot-com bubble. “The best example is eBay, which by 2001 had become a dominant platform for consumer auctions, and was the third-ranked web site in terms of time spent by consumers2”(Linav, et al.,2013). “Its marketplace transaction volume reached 9.3 billion dollars in 2001 (it has subsequently risen to over $67 billion as of 2012)” (Linav, et al.,2013).
Long before online auctions, people used auctions for almost any kind of goods and services (Ockenfels &Reiley &Sadrieh,2006). Previous studies about history of auctions report (Cassady,1967) that auctions have always been a crucial and prevalent factor in our economy. Although one of the advantages of online auction is that the bidders do not need to travel long distances to take part in
1 In this paper, whenever we refer to auction, we mean second-bid English auctions. For more information the following paper could a good source : Auction theory: a guide to the literature ( Klemperer, 2009)
2 Source: http://blog.compete.com/2007/10/01/top-rank...

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...tion is necessary.
 Need for data which include time as a parameter
 Classification of Data could affect the result
 The price range of products are not that broad
 Bidders approach cannot be measured (optimist VS Pessimist)
 Lack of inclusion of endowment effect( The bidders do not bid actual money therefore they skip stage of entry/choice)
To conclude, we believe that despite the current trend of online auctions, this type of web-based service is still the most predominant within e-commerce. Introduction of new fields such as information economic might help researcher to combine theoretic material in-hand with their empirical evidence. We also believe that behavioral studies might help sellers and auctioneers to enhance the classification of information they produce the bidders with. Further investigation would be followed in MIS, Marketing and Economic area.

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