An Analysis of Price Dynamics, Bidder Networks, and Market Structure in Online Art Auctions

One of the greatest contributions of e-comrnerce and online auctions is their ability to provide detailed bidding records in the form of a bid history. These data sources not only furnish dynamic information regarding the status of auctions, but also capture the essence of auction activities that was not accessible from live auctions. In this chapter, we explore three broad online auction issues from these bidding data: the effects of various factors on price dynamics, effects of inter-bidder interactions on bidder dynamics, and underlying relationships of auctioned objects. From the auction house manager's perspective, insights from issues like how price formation takes place, how competitive bidding among bidders evolves, and which items are perceived as similar and dissimilar by the bidders are vital in setting up future auctions. Here we present results online auctions of fine arts. of the above investigations using data from