An Empirical Analysis of Factors Affecting the Bidding Competition in an Online Auction: a Comparison between English and Buy-it-now Auctions

We examine the factors affecting the bidding competition in the online auction environment in this study. We propose a conceptual model to explain how information, including the reputation records of sellers and product quality, affects the level of competition in an online bidding environment. To test our model, digital camera auction data have been collected from eBay and Yahoo! auction websites and analyzed using the multiple regression method. We have found that the influence of factors is depending on the auction mechanisms. While the positive and the non-positive peer evaluation records of a seller have an influence on the level of bidding competition in the English and the BIN auction formats, their impacts are opposite: The positive peer evaluation records have a positive impact in the English auction, but a negative impact in the BIN auction; and negative peer evaluation records have a negative impact in the English auction, but a positive impact in the BIN auction. Plus, the provision of warranty has a negative impact in the BIN auction. This result helps electronic commerce practitioners to gain a better understanding of the bidders’ behavior and helps them to develop better business strategies in the electronic marketplace.