The Volkswagen emissions scandal began in 2015, when the U.S. Environmental Protection Agency announced that diesel cars produced by Volkswagen from 2009 through 2015 were in violation of emissions ...standards. The authors analyze the impact of this announcement on transaction prices for Volkswagen cars on the U.S. eBay Motors. The main focus is on Volkswagen cars other than the 2009–2015 diesel models—namely, vehicles that did not violate agency standards, enabling an assessment of whether the negative shock received by the emissions standards violators spilled over to other Volkswagen models that were in compliance. The difference-in-differences results show that final bid prices declined after the announcement by 14% for nonviolating diesel cars and 9% for nonviolating gasoline cars. The analysis also provides little evidence of considerable changes in the numbers of participating bidders, bidding strategies, numbers of listings, and reserve-price strategies, suggesting that the drops in prices likely resulted from lowered willingness to pay from buyers.
eBay’s proxy bidding: A license to shill Engelberg, Joseph; Williams, Jared
Journal of economic behavior & organization,
10/2009, Letnik:
72, Številka:
1
Journal Article
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We introduce a bidding strategy which allows the seller to extract the full surplus of the high bidder in eBay auctions. We call this a “Discover-and-Stop” bidding strategy and estimate that 1.39 ...percent of all bids in eBay auctions are placed by sellers (or accomplices) who execute this strategy. We argue that this kind of shill bidding is unnecessarily effective due to eBay’s proxy system and the predictability of other bidders’ bids. We also model eBay auctions with shill bidding and find that, in equilibrium, eBay’s profits are higher with shilling than without it. Finally, to determine whether bidders have an incentive to bid on their own items, we mimic the bidding behavior of shill bidders in actual eBay auctions and find some evidence of the strategy’s success.
Research provides increasing evidence that women and men differ in their decisions to trust. However, information systems research does not satisfactorily explain why these gender differences exist. ...One possible reason is that, surprisingly, theoretical concepts often do not address the most obvious factor that influences human behavior: biology. Given the essential role of biological factors—and specifically those of the brain—in decisions to trust, the biological influences should naturally include those related to gender. As trust considerations in economic decision making have become increasingly complex with the expansion of Internet use, understanding the related biological/brain functions and the involvement of gender provides a range of valuable insights. To show empirically that online trust is associated with activity changes in certain brain areas, we used functional magnetic resonance imaging (fMRI). In a laboratory experiment, we captured the brain activity of 10 female and 10 male participants simultaneous to decisions on trustworthiness of eBay offers. We found that most of the brain areas that encode trustworthiness differ between women and men. Moreover, we found that women activated more brain areas than did men. These results confirm the empathizing— systemizing theory, which predicts gender differences in neural information processing modes. In demonstrating that perceived trustworthiness of Internet offers is affected by neurobiology, our study has major implications for both IS research and management. We confirm the value of a category of research heretofore neglected in IS research and practice, and argue that future IS research investigating human behavior should consider the role of biological factors. In practice, biological factors are a significant consideration for management, marketing, and engineering attempts to influence behavior.
A brusque opinion by the U.S. Supreme Court in a patent case has launched a revolution in the law of equitable remedies. The Court's opinion in eBay Inc. v. MercExchange, L.L.C, asserted that it was ...merely upholding "traditional pnnciples" regarding when injunctions should issue. But in circuit after circuit and for subject matter ranging from federal constitutional law to state tort law, lower courts have understood eBay to abrogate longstanding approaches. Focusing on the law for permanent injunctions, this Article examines the eBay opinion and the far-reaching changes that have resulted. For a better perspective on these changes, this Article discusses how courts historically have addressed equity's traditional concerns with risks of irreparable injury and the balance of hardships. Finally, this Article provides a normative account of the structured sets of equitable presumptions and safety valves that current understandings of eBay threaten to sweep aside.
Peer-to-Peer (P2P) reputation systems are essential to evaluate the trustworthiness of participating peers and to combat the selfish, dishonest, and malicious peer behaviors. The system collects ...locally-generated peer feedbacks and aggregates them to yield the global reputation scores. Surprisingly, most previous work ignored the distribution of peer feedbacks. We use a trust overlay network (TON) to model the trust relationships among peers. After examining the eBay transaction trace of over 10,000 users, we discover a power-law distribution in user feedbacks. Our mathematical analysis justifies that power-law distribution is applicable to any dynamically growing P2P systems, either structured or unstructured. We develop a robust and scalable P2P reputation system, PowerTrust, to leverage the power-law feedback characteristics. The PowerTrust system dynamically selects small number of power nodes that are most reputable using a distributed ranking mechanism. By using a look-ahead random walk strategy and leveraging the power nodes, PowerTrust significantly improves in global reputation accuracy and aggregation speed. PowerTrust is adaptable to dynamics in peer joining and leaving and robust to disturbance by malicious peers. Through P2P network simulation experiments, we find significant performance gains in using PowerTrust. This power-law guided reputation system design proves to achieve high query success rate in P2P file-sharing applications. The system also reduces the total job makespan and failure rate in large-scale, parameter-sweeping P2P Grid applications.
Summary
Reuse via secondhand markets can extend the use phase of products, thereby reducing environmental impacts. Analyzing 500,000 listings of used Apple and Samsung smartphones sold in 2015 and ...2016 via eBay, we examine which product properties affect how long smartphones retain market value and facilitate market‐based reuse. Our results suggest that although repairability and large memory size are typically thought to be “life extending,” in practice they have limited impact on the current economic life span of smartphones and their market‐based reuse. In contrast, we show that brand, an intangible product property, can extend smartphones’ economic life span by 12.5 months. Because longer economic life spans imply extended use phases and longer life spans overall, these results illustrate the potential of harnessing the intangible properties of products to promote sustainable consumption.
Previous research showed that words for which the consonant articulation spots wander from the front of the mouth to the back (e.g., EPOK; inward) are preferred over words with the reversed sequence ...(e.g., EKOP; outward). In the present research, we extended this effect to judgments of online seller trustworthiness and choice of transaction partners. In seven experiments in the context of the online auction market eBay, we show that the mere use of inward compared to outward usernames increases the level of trustworthiness ascribed to online sellers (Experiments 1A, 1B, 2, 4A, 4B) and the likelihood that a seller is chosen for the economic transaction (Experiment 5). As a boundary condition, this effect is reduced when diagnostic information about the seller's reputation is introduced (Experiment 3). We discuss these results in terms of their practical implications for marketing strategies of online sellers and in terms of their relation to research on interpersonal trust.
Purpose
The endowment effect is arguably one of the most robust phenomena documented in economics, behavioral decision theory and consumer research. However, the endowment effect has traditionally ...been studied as a fairly static phenomenon at the transactional level of analysis.
Design/methodology/approach
This paper documents this “contagious” endowment effect using lab experiments and such field data as eBay transactions and discuss the managerial implication of these findings.
Findings
This study suggests that the endowment effect is not limited to the level of the specific object, but can manifest itself with the more abstract class of objects to which a specific object happens to belong.
Research limitations/implications
A logical next step would be to examine the boundary conditions – how similar does the subsequent object have to be for the endowment effect to transfer over to it? A related aspect would be whether there are boundary conditions arising from the quality of the endowment.
Practical implications
The effects reported here probably underlie the success of the many types of “bait and switch” schemes that have been used by the more unsavory type of marketer. As such, these findings might have implications for policy in the area of consumer protection.
Originality/value
This paper argues for and presents evidence consistent with the notion that the endowment effect is dynamic and can be transferred from one transaction to another and refer to this generalization of the endowment effect to other, similar products as “contagious endowment.”
To sell a good before a deadline, a monopolist chooses between posting a price and running a costly reserve-price auction each period. Buyers with independent private values arrive over time. For a ...wide range of auction costs, the profit-maximizing mechanism sequence is to post prices first and then to run auctions. The optimality of the prices-then-auctions mechanism sequence provides a new justification for the hybrid sales mechanism of allowing the “Buy It Now” option before a standard auction on eBay.
Abstract
We study disappointment and platform exit among new bidders in an online auction marketplace. In particular, we study a hybrid auction format with a “Buy-It-Now” option, which, when ...executed, will abruptly end the auction and cancel any standing bids. When this happens, if the formerly leading bidder is new to the platform, then they are 6 percentage points more likely to exit the marketplace for every additional day they spent in the lead. This is rationalized by disappointment-averse bidders with outside options and rational expectations about the likelihood of winning. Our explanation is validated by three ancillary predictions: when expectations are lowered by higher competing bids, there is no effect; sensitivity of exit is declining in prior experience; and, for bidders who do not exit, time in the lead during the first experience predicts a subsequent preference for fixed-price, rather than auction, listings.
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