Understanding effects of seller's and bidder's characteristics on Internet auction applications

  • Authors:

  • Chu-Fen Li

  • Affiliations:

  • Graduate Institute of Business and Management, Department of Finance, National Formosa University, Huwei, Yunlin 63201, Taiwan, ROC

  • Venue:
  • Expert Systems with Applications: An International Journal
  • Year:
  • 2010

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Abstract

This paper discusses the effects of factors on Internet auctions. The anonymity of online auctions is convenient and stressless. However, trust becomes an important issue. Bidders need to feel safe about the reliability of the seller for placing bids on an auction. Seller's characteristics could affect the evaluation and the deal of the online auctions. This study employs collected eBay data set to analyze the effects of factors, bidders' and sellers' characteristics on the final price and the duration of the auction. Important factors are recognized by a probit model. Seller's items for sale (SIFS), bidder's lifetime positive feedback (BLPF), and seller's lifetime positive feedback (SLPF) are the most important factors identified by the probit analysis. Furthermore, impacts of important factors and their interactions are studied by factorial design approach. The results of the study reveal that SLPF plays a major role in affecting the final price (51.2%) and both SIFS and BLPF are the critical roles (20.1% and 28.1%, respectively). Furthermore, the interaction of BLPF and SLPF also are important to affect the final price (4.5%). Consequently, the final price heavily depends on the bidder and seller ratings. For the duration of the auction, SLPF explains most of the variations (62.8%). Seller's reputation is decisive no matter in performance on the duration of the auction or final price.