In a typical eBay auction: bidders compete for a fixed period of time, and at the end of period the highest bidder gets the good and pays his bid to the seller. During this process, any bidder can see the history of highest bids. I've these questions:
1) How important is information asymmetry in eBay auctions considering perspective of both the buyer and seller.
2) eBay has a rating system for each seller. What is the economic rationale for this (from the perspective of increasing expected revenues of the seller)?
3) In eBay auctions, should bidders be willing to bid up to their value for the good or not? Justify your answer.
4) Most bids come in right before the auction closes. What is an economic rationale for this behavior? Should this be more of a problem for common value or private value auctions?
5) Is collusion likely to be a problem here? In particular, does the auction design promote or discourage collusion?
I've some ideas but need your help to refine them.
2006-10-11
16:45:14
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3 answers
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asked by
SC
2