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The Choice of Opening Prices on eBay
The Manchester School (2009)
  • Mikhail I. Melnik, Kennesaw State University
  • James Alm, Georgia State University
  • Yongsheng Xu, Georgia State University
In this paper we examine the choice of the opening bid on eBay by sellers of US Morgan dollar coins. We find that the opening bid is a function of the observed characteristics of the past transaction prices for the coin, the seller's characteristics and the fee structure imposed by the auctioneer. The results demonstrate that increasing the opening bid fee structure induces a lower optimal opening bid, while an increase in the degree of risk in the price distribution increases the opening bid. These results have important implications for market structure of online auction sites.
Publication Date
June, 2009
Citation Information
Mikhail I. Melnik, James Alm and Yongsheng Xu. "The Choice of Opening Prices on eBay" The Manchester School Vol. 77 Iss. 4 (2009)
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