Online Auction Study reveals listing tips
A 2003 study entitled Doing their bidding: An empirical examination of factors that affect a buyers utility in internet auctions, Kaufmann et al (2003) has revealed some interesting if fairly common sense, findings about eBay auctions. Kaufmann et al investigated 55,000 bids over a 3 year period. By choosing the focus their attention on coin, a category where industry standard quality measurements make it easy to compare listings, they were able to compare how buyer behaviour varies for the same item under different conditions. The report came to the following conclusions
- Number of bidders. The number of prior bidders increases a single bidders valuation for an item.
- Previous purchases have no effect. The price a bidder is willing to pay is not affected by prices they have previously paid for an this item
- Information has a large effect. Unsurprisingly, prices is effected by description length and the presence of a picture
- Weekend effect. Bidders tend to pay more for the same items at the weekend. The theory here is that the buyers have more time to make a
- Reputation has little effect. This study found that feedback had little effect, something which disagrees with other studies.
This study reinforces the importance of providing information to your buyers and of low starting prices to encourage bidding.