Winner's curse and parallel sales channels-Online auctions linked within e-tail websites [An article from: Information & Management]

This digital document is a journal article from Information & Management, published by Elsevier in 2006. The article is delivered in HTML format and is available in your Amazon.com Media Library immediately after purchase. You can view it with any web browser.

Description:
A sample of 416 online auctions was examined to determine the extent of overpayment (winner's curse) where online auctions and e-tail websites were linked together to form a parallel sales channel. The results indicated that 8.7% of the highest winning online auction bidders exceeded e-tail posted reference prices of identical retail merchandise found at the same website. Significantly, such bids exceeded the reference prices by a mean percentage dollar amount of 14.1% thus suggesting the existence of a winner's curse. The results also indicated that (1) there was a significant negative association between reference price and mean percentage dollar amount overbid; (2) there was a significant negative association between auction lot size and mean percentage dollar amount overbid; and (3) there was no significant association between overtime auctions and mean percentage dollar amount overbid. While manipulation of reference price and auction lot size might minimize winner's curse, erratic or irrational behavior (by online auction and/or e-tail websites) may lead to disinformation.