Essays on Internet auctions

This dissertation examines the online auction markets and focuses on eBay in particular. EBay provides an environment in which losers can bid again and we study the effects of this dynamic feature on the bidding behavior of buyers. Chapter 1 presents the introduction for the dissertation. In Chapter 2 we first introduce the eBay market and the data we have collected. Then we focus on the bidding behavior of bidders and empirically analyze the importance of the dynamics while modeling eBay auctions. In Chapter 3 we develop a theoretical model and show that the option to bid again leads to last-minute bidding for bidders. We also examine some empirical predictions of the model. Chapter 4 analyzes the impact of a particular eBay feature called Buy-It-Now on bidding behavior of bidders. This feature is a choice for the seller that enables participants to preempt and end the auction early without competing with other bidders. Chapter 5 summarizes main conclusions of the dissertation and proposes directions for future research.