Study On Seller's Strategies In Online English Auction

With the rapid development of electronic commerce, online auction is increasingly becoming a popular trading form. Traditional auction theory today cannot be directly adopted to interpret and analyze the new questions and new phenomena emerged in online auctions due to the factors such as many people participating in online auctions with their variety of bidding behaviors, many auctioned goods with large variety of categories, and many new action forms. Unlike the existing literature on bidder's strategies, this dissertation mainly study on the seller's strategies in online English auctions.Firstly, using the English auction transaction data collected from both Taobao and eBay for some items contained in the five categories including coins, drawings and paintings, stamps, emeralds, necklaces & pendants, and books, this dissertation investigates the determinants of the price of the items in online auction from the viewpoint of the seller's strategy. The empirical results suggest that, in online auction, both the starting price set by a seller and the seller's reputation have positive and significant impacts on the transaction price, whereas some factors including whether a product being new or not, and the insurance provided for the item, have different roles in the final prices for different goods. Yet the effect of the closing time of auction, whether in the evening or on weekend, as well as the length of the auction on the price is not clear.Secondly, this dissertation adopts a simple repetition game model to study the value of seller's reputation in online English auction and establishes a signal transition model regarding seller's reputation based on Bayesian learning rule to analyze the impacts of seller's reputation on the expectation value, transaction probability and final transaction price of the auctioned goods. The theoretical results indicate that it is worthwhile building a good reputation in online auction for a seller.Thirdly, this dissertation empirically tests some implications obtained from the theoretical analysis in chapter 3 by using the English auction data collected from Taobao and eBay for some items contained in the categories including coins, stamps, emeralds, necklaces & pendants, and books, respectively. The empirical results suggest that (1) higher reputation is associated with greater transaction probability, higher final transaction price of good, and more bidders in the online English auction; (2) the seller's positive (negative) feedback will increase (decrease) the item's transaction probability, final transaction price as well as the number of bidders; and (3) there exists asymmetric characteristics of seller's reputation in online auction, that is, compared with the negative feedbacks, the positive ones have more impacts on the buying behaviors, and that asymmetric phenomena manifest more obviously in some items with easily measuring their quality.Finally, this dissertation examines the role and optimal setting of starting price in online English auction with the results indicating that whether on Taobao or on eBay, whether for coins, for drawings and paintings or for books, the starting prices set by seller will significantly reduce the transaction probability of goods, while also enhance the item's transaction prices evidently. Furthermore, based on the assumptions that all bidders are risk neutral and their valuation for auctioned goods are independent, this dissertation also gives a simple analysis of the optimal setting of starting price in English online auctions. The result suggests that there is no correlation between starting price and fixed cost but exist close correlations between starting price and the valuations of buyers and seller as well as the fees charged by the auction website.Taken together, the issues investigated in this dissertation from the viewpoint of seller's strategies, especially the results obtained from the studies on the role of seller's reputation and starting price in online English auction, have good implications for sellers to set reasonable strategies in online English auction, and also provide some instructive insights for domestic auction websites' further development and improvement.