article

Understanding Willingness-to-Pay Formation of Repeat Bidders in Sequential Online Auctions

Authors:

Gilbert G. Karuga,

Arvind K. TripathiAuthors Info & Claims

Information Systems Research, Volume 21, Issue 4

Pages 907 - 924

https://doi.org/10.1287/isre.1080.0216

Published: 01 December 2010 Publication History

Abstract

A growing number of vendors are using a sequence of online auctions to sell large inventories of identical items. Although bidding strategies and bidder behavior in single auctions have been extensively studied, limited research exists on bidding in sequential auctions. We seek to explain how bidders in such an environment learn from the information, and form and update their willingness to pay (WTP). Using a large data set from an online auction retailer, we analyze the evolution of the bidders' WTP as well as the effect of auction design on bidders' WTP in sequential auctions. We see our study in the context of a longitudinal field experiment, in which we were able to track actions of repeat bidders over an extended period of time. Our results show that bidders' WTP in sequential auctions can be explained from their demand characteristics, their participation experience in previous auctions, outcomes in previous auctions, and auction design parameters. We also observe, characterize, and measure what we call a modified demand reduction effect exhibited across different auctions, over time, by multiunit demand bidders. Our findings are important to enable better auction mechanism design, and more sophisticated bidding tools that explore the rich information environment of sequential auctions.

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Cited By

Truong MGupta AKetter Wvan Heck E(2022)Buyers’ Strategic Behavior in B2B Multichannel Auction MarketsInformation Systems Research10.1287/isre.2022.118033:4(1344-1367)Online publication date: 1-Dec-2022
https://dl.acm.org/doi/10.1287/isre.2022.1180
Tripathi ALee YBasu A(2022)Analyzing the Impact of Public Buyer–Seller Engagement During Online AuctionsInformation Systems Research10.1287/isre.2022.111433:4(1264-1286)Online publication date: 1-Dec-2022
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Lu YGupta AKetter Wvan Heck E(2019)Information Transparency in Business-to-Business Auction MarketsManagement Science10.1287/mnsc.2018.314365:9(4261-4279)Online publication date: 1-Sep-2019
https://dl.acm.org/doi/10.1287/mnsc.2018.3143
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Understanding Willingness-to-Pay Formation of Repeat Bidders in Sequential Online Auctions
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cover image Information Systems Research

Information Systems Research Volume 21, Issue 4

December 2010

350 pages

ISSN:1526-5536

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INFORMS

Linthicum, MD, United States

Publication History

Published: 01 December 2010

Received: 05 April 2006

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Cited By

Truong MGupta AKetter Wvan Heck E(2022)Buyers’ Strategic Behavior in B2B Multichannel Auction MarketsInformation Systems Research10.1287/isre.2022.118033:4(1344-1367)Online publication date: 1-Dec-2022
https://dl.acm.org/doi/10.1287/isre.2022.1180
Tripathi ALee YBasu A(2022)Analyzing the Impact of Public Buyer–Seller Engagement During Online AuctionsInformation Systems Research10.1287/isre.2022.111433:4(1264-1286)Online publication date: 1-Dec-2022
https://dl.acm.org/doi/10.1287/isre.2022.1114
Lu YGupta AKetter Wvan Heck E(2019)Information Transparency in Business-to-Business Auction MarketsManagement Science10.1287/mnsc.2018.314365:9(4261-4279)Online publication date: 1-Sep-2019
https://dl.acm.org/doi/10.1287/mnsc.2018.3143
Lu YGupta AKetter Wvan Heck E(2019)Dynamic Decision Making in Sequential Business-to-Business AuctionsManagement Science10.1287/mnsc.2018.311865:8(3853-3876)Online publication date: 1-Aug-2019
https://dl.acm.org/doi/10.1287/mnsc.2018.3118
Choudhary VShivendu S(2017)Targeted Couponing in Online AuctionsInformation Systems Research10.1287/isre.2017.068828:3(490-510)Online publication date: 1-Sep-2017
https://dl.acm.org/doi/10.1287/isre.2017.0688
Lu YGupta AKetter WHeck E(2016)Exploring bidder heterogeneity in multichannel sequential B2B auctionsMIS Quarterly10.25300/MISQ/2016/40.3.0640:3(645-662)Online publication date: 1-Sep-2016
https://dl.acm.org/doi/10.25300/MISQ/2016/40.3.06
Overby EKannan K(2015)How Reduced Search Costs and the Distribution of Bidder Participation Affect Auction PricesManagement Science10.1287/mnsc.2014.204361:6(1398-1420)Online publication date: 1-Jun-2015
https://dl.acm.org/doi/10.1287/mnsc.2014.2043
Chang S(2014)Multiple overlapping online auction marketDecision Support Systems10.1016/j.dss.2014.04.00864:C(57-66)Online publication date: 1-Aug-2014
https://dl.acm.org/doi/10.1016/j.dss.2014.04.008
Kannan K(2012)Effects of Information Revelation Policies Under Cost UncertaintyInformation Systems Research10.1287/isre.1100.029223:1(75-92)Online publication date: 1-Mar-2012
https://dl.acm.org/doi/10.1287/isre.1100.0292
Park JLee JLau HKauffman RBichler MLau HYang YYang C(2012)Bidder behaviors in repeated B2B procurement auctionsProceedings of the 14th Annual International Conference on Electronic Commerce10.1145/2346536.2346563(145-152)Online publication date: 7-Aug-2012
https://dl.acm.org/doi/10.1145/2346536.2346563

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