Bidding behavior in competing auctions: Evidence from eBay

To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.euroecorev.2004.10.007 Byline: Sajid Anwar (a)(b), Robert McMillan (c), Mingli Zheng (d) Abstract: Much of the existing auction literature treats auctions as running independently of one another, with each bidder choosing to participate in only one auction. However, in many online auctions, a number of substitutable goods are auctioned concurrently and bidders can bid on several auctions at the same time. Recent theoretical research shows how bidders can gain from the existence of competing auctions, the current paper providing the first empirical evidence in support of competing auctions theory using online auctions data from eBay. Our results indicate that a significant proportion of bidders do bid across competing auctions and that bidders tend to submit bids on auctions with the lowest standing bid, as the theory predicts. The paper also shows that winning bidders who cross-bid pay lower prices on average than winning bidders who do not. Author Affiliation: (a) School of Business, James Cook University, P.O. Box 6811, Cairns, QLD 4870, Australia (b) IGSM University of South Australia, Adelaide, SA 5000, Australia (c) Department of Economics, University of Toronto, Toronto, Ontario M5S 3G7, Canada (d) Faculty of Social Sciences and Humanities, University of Macau, Taipa, Macau, China Article History: Received 25 February 2003; Accepted 4 October 2004 Article Note: (footnote) [star] This paper is based on Chapter 1 of Mingli Zheng's 2002 University of Toronto PhD thesis.