Revisiting Bidder Heterogeneities in Online Auctions (The Case of Soft vs. Hard Closing Formats)

The current study offers an insight into how auction ending rules can affect distribution online bidders’ strategies. While traditional wisdom in this area suggested that auction ending rules can encourage and suppress certain bidding behaviors, limited efforts have been taken to investigate how they can affect winning likelihood and price premium distribution across different bidding strategies. To evaluate such impacts of auction ending rules, auction data were collected from two auction websites (eBay and Dellauction.com). A total of 288 auction transactions were collected and later used in the data analyses. Initial results indicate that auction ending rules do affect winning likelihood and distribution of price premium across different bidder classes. A bidding strategy that was found effective in generating higher price premium under an auction ending rule may not necessarily be effective under a different auction ending rule. Practical implications are offered at the end of the study.