The Timing of Bid Placement and Extent of Multiple Bidding: An Empirical Investigation Using eBay Online Auctions

Abstract

Online auctions are fast gaining popularity in today’s electronic commerce. Relative to offline auctions, there is a greater degree of multiple bidding and late bidding in online auctions, an empirical finding by some recent research. These two behaviors (multiple bidding and late bidding) are of “strategic” importance to online auctions and hence important to investigate.

In this article we empirically measure the distribution of bid timings and the extent of multiple bidding in a large set of online auctions, using bidder experience as a mediating variable. We use data from the popular auction site www.eBay.com to investigate more than 10,000 auctions from 15 consumer product categories. We estimate the distribution of late bidding and multiple bidding, which allows us to place these product categories along a continuum of these metrics (the extent of late bidding and the extent of multiple bidding). Interestingly, the results of the analysis distinguish most of the product categories from one another with respect to these metrics, implying that product categories, after controlling for bidder experience, differ in the extent of multiple bidding and late bidding observed in them.

We also find a nonmonotonic impact of bidder experience on the timing of bid placements. Experienced bidders are “more” active either toward the close of auction or toward the start of auction. The impact of experience on the extent of multiple bidding, though, is monotonic across the auction interval; more experienced bidders tend to indulge “less” in multiple bidding.