The Impact of Soft-Close Auctions on Bid Behavior: A Randomised Controlled Experiment
Abstract
This thesis studies the effect of longer extensions on bidding behaviour in online
auctions. The study uses a randomised controlled experiment through Pantbanken
Sverige, a Swedish pawnbroker. The results indicate positive effects on the seller’s
revenue due to longer extensions, although these effects were not statistically significant.
The upper bounds of the confidence intervals do not rule out the possibility of
price increases of ten percent when increasing the extensions from thirty to ninety
seconds. Additionally, longer extensions significantly increase the probability of
further bidding after triggering the first extension. This effect is stronger for gold
items, where previous research has highlighted the strategic advantage of late bidding
for common value goods. This study provides a first attempt at an empirical
investigation of the dynamics of variations in the extensions in online auctions. The
potential profitability increase in revenue emphasises the need for further research
on the subject.
Degree
Master 2-years
Other description
MSc in Economics
Collections
View/ Open
Date
2023-10-10Author
Kellgren, Martin
Keywords
Online Auctions
soft-close auctions
longer extension
randomised controlled experiment
private value
common value
seller’s revenue
Series/Report no.
2023:31
Language
eng