Stakeholder interaction and internet auction outcomes: analyzing active disclosure

Authors:
Ananth Srinivasan;Fangxing Liu
Affiliations:
University of Auckland, Auckland, New Zealand;University of Auckland, Auckland, New Zealand
Venue:
Proceedings of the 13th International Conference on Electronic Commerce
Year:
2011

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Abstract

Better understanding of information asymmetry in internet auctions by researchers has led to improved online auction designs, increased market efficiency, and therefore better outcomes for all stakeholders. In this paper we focus on a specific aspect of internet auctions that has not received much attention in the literature: the presence of interaction between buyers and sellers while an auction is in progress -- so called "live interaction". Examples of such interaction include characteristics of questions from buyers, answers and other disclosures from sellers, conversation threads, etc. We believe that such interaction differentiates active disclosure from seller volunteered information (passive disclosure). The facilitation of live interaction is a feature of the auction site TradeMe which represents 60% of all internet traffic in New Zealand. We collected data from 532 auctions of used cars over a three week period. In addition to data about the auction itself, we collected data about the number of questions asked and answered, the average length of the questions and answers, number of conversation threads and the use of specific textual triggers in the questions that encompass sentiments such as intent, politeness, and courtesy words. We modeled the problem using logistic regression to isolate live interaction based determinants of auction outcomes. We studied the effects of live interaction variables on outcomes in two ways: by themselves; and embedded in a larger model encompassing more traditional auction characteristics. The results show which specific aspects of live interaction between buyers and sellers are significant in determining auction outcomes. We propose that such interaction is greatly facilitated by the use of mobile devices and building it in as a necessary design feature can produce superior outcomes.