An experimental analysis of ending rules in Internet auctions

A great deal of late bidding has been observed on eBay, which employs a second price auction with a fixed deadline. Much less late bidding has been observed on Amazon, which can only end when ten minutes have passed without a bid. In controlled experiments, we find that the difference in the ending rules is sufficient by itself to produce the differences in late bidding observed in the field data. The data also allow us to examine bid amounts in relation to private values, and how behavior is shaped by the different opportunities for learning provided in the auction conditions. Copyright © 2005, RAND.

Duke Scholars

Author Dan Ariely Fuqua School of Business