Competition, endogenity and the winning bid : an empirical analysis of eBay

dc.contributor.authorOnur, I.
dc.contributor.authorVelamuri, M.
dc.date.issued2011
dc.description.abstractUsing a dataset of Texas Instruments (TI) calculator auctions on eBay, we analyze the effect of the number of bidders on the winning bid. We highlight the possible endogeneity associated with using the number of observed bidders. We tackle this problem by employing approaches involving instrumental variables. Our results suggest that the winning bid is an increasing function of the number of bidders when we treat the latter as exogenous. Endogenizing the number of bidders reverses the result; controlling for bidder participation, an increase in the number of bidders lowers the winning bid on average. Our results indicate the presence of a strong common value component in our data.
dc.identifier.urihttps://hdl.handle.net/1959.8/114796
dc.language.isoen
dc.publisherUniversity of South Australia
dc.relation.ispartofseriesCRMA working paper series, 2011-06
dc.rightsCopyright [2011] Ilke Onur and Malathi Velamuri. Not for distribution without permission of author(s).
dc.subjectonline auctions
dc.subjecteBay
dc.subjectendogeneity
dc.subject2SLS
dc.subjectLIML
dc.titleCompetition, endogenity and the winning bid : an empirical analysis of eBay
dc.typeWorking paper
pubs.publication-statusPublished
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