Searching the eBay Marketplace

Sailer, Katharina (October 2006): Searching the eBay Marketplace. Discussion Papers in Economics 2006-32

Abstract

This paper proposes a framework for demand estimation with data on bids, bidders' identities, and auction covariates from a sequence of eBay auctions. First the aspect of bidding in a marketplace environment is developed. Form the simple dynamic auction model with IPV and private bidding costs it follows that if participation is optimal the bidder searches with a "reservation bid" for low-price auctions. Extending results from the empirical auction literature and employing a similar two-stage procedure as has recently been used when estimating dynamic games it is shown that bidding costs are non-parametrically identified. The procedure is tried on a new data set. The median cost is estimated at less than 2% of transaction prices.

• Item Type: Paper (Discussion Paper)
• Keywords: search models, auctions, eBay, Internet auctions, econometrics of auctions, bidding costs, identification
• Subjects: Economics; Economics > Discussion Papers in Economics; Economics > Discussion Papers in Economics > Industrial Organization; Economics > Discussion Papers in Economics > Economics of Information
• Dewey Classification: 300 Social sciences; 300 Social sciences > 330 Economics
• Journal of Economic Literature classification: C23, C51, D44, D82, D83, L10, L81
• Language: English