An examination of auction price determinants on Ebay

Online auction has become an intriguing new type of economic exchange mechanism. Given that Internet auctions differ from traditional physical auctions in terms of flexibility and synchronicity, there is much doubt as to whether existing theoretical and empirical literature on traditional physical auctions still holds. This paper seeks to unravel factors affecting Internet auction prices. Specifically, it draws on current Internet auction literature and features of eBay website to identify a set of five factors affecting online auction prices for two types of coins traded on eBay. The data consists of 1251 auction records, which were collected by a work group to insure data accuracy and completeness. Regression analyses on full samples and restricted small sample sets were performed. We have three major findings. First, the number of unique bidders and the minimum bid tended to have positive effect on the auction price. The effect of minimum bid was especially significant. Second, the duration of auction and the seller’s feedback rating did not affect the auction price significantly. Third, whether the auction closed on weekend or not had little impact on the auction price. Implications for online sellers and auctioneers were drawn.