Working Paper: NBER ID: w10076
Authors: Patrick Bajari; Ali Hortacsu
Abstract: This paper surveys recent studies of Internet auctions. Four main areas of research are summarized. First, economists have documented strategic bidding in these markets and attempted to understand why sniping, or bidding at the last second, occurs. Second, some researchers have measured distortions from asymmetric information due, for instance, to the winner's curse. Third, we explore research about the role of reputation in online auctions. Finally, we discuss what Internet auctions have to teach us about auction design.
Keywords: Internet auctions; Strategic bidding; Winners curse; Reputation mechanisms; Auction design
JEL Codes: L1; D8
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Information Asymmetry (D82) | Bidding Strategies (D44) |
| Winners Curse (D44) | Bidding Behavior (D44) |
| Bidders Adjust Bids Based on Competing Bidders (D44) | Bidding Behavior (D44) |
| Reputation Mechanisms (D82) | Trust Among Participants (Z13) |
| Reputation Mechanisms (D82) | Prices Commanded by Sellers (D41) |
| Auction Design (D44) | Bidding Strategies (D44) |
| Auction Design (D44) | Auction Outcomes (D44) |