Full Length Research Paper
Abstract
The proliferation of Internet auction elicits many interesting research questions for researchers engaging in this area. This study applies the empirical model to test whether the prices generated from different auction formats in eBay are equivalent. The daily observations in each format from eBay auctions are employed, and the empirical findings give rise to an important implication for internet auctions. The prices generated from different auction formats would be likely to converge except for the combination of the fixed-price listings with the best-offer option and the auction-style listings with the buy-it-now price. Therefore, the sellers’ expected revenues would be equal even they specify their auctions with different formats.
Key words: Internet, price convergence, auction formats, eBay JEL classifications: D44.
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