Ebay generates billions in revenue each quarter from its online auction marketplace. The document discusses analyzing auction data from Ebay to study bidder behavior and what listing characteristics affect prices. It then summarizes findings from tracking iPhone and Call of Duty auctions over 10 weeks, such as auction duration and shipping costs correlating with higher prices. Lastly, it provides tips for users, suggesting encouraging competition, using low starting bids, establishing credibility, and being wary of shilling.

1. EbayAuctionomics Elliot Haas

2. WhyEbay? Rediculous Revenues $2 Billion+ EACH QUARTER In 2010 Lots of Listings In 1997, the total amount of listings went from 250K-24mil. Lots-o-Room forResearch 94 million+ Active users!

3. Presentation Agenda 1. Ebay In Depth 2. Data Set of Field Observations 3. Auction Theory and Research Findings 4. Conclusions and Advice for Ebay Users ***All Screenshots, Statistics and Findings shown are either found on Ebay, or created by my own dataset.

4. Ebay In Depth The Ebay Story 1995 1998 2010 1995 2002 2002 THE ‘EXPERIMENT’ GOING PUBLIC ENTER: PAYPAL MOBILE EBAY App Launch creates all new Ebaymobile market IPO 3.5 Million Shares $18.00/Share PayPal Ebay acquires the payment service company for $1.5 BILLION Pierre Omidyar creates Ebay(“AuctionWeb")

5. Ebay In Depth Types of Auctions

7. Item Category

8. Starting Price

9. Reserve Price (if any)

11. The Data Process of Collection Auction Tracking over a 10-week period from January 15th 2011 - April 2nd 2011 Watch list on PC Ebay iPhone App

12. The Data Characteristics of the Data ALL ITEMS ARE… Sold by AUCTION! Shipped within North America In New Condition iPhone 4 Call of Duty

13. The Data Data Transfer -Total Cost (Final Price + Shipping Costs) -Total # of bids -# of bidders -Duration (1, 3, 5, 7, or 10 days) -Seller reputation (percentage of positive ratings) -Shipping Costs -Ending Time (Hour of day 0-24) -Use of word “SEALED” watchlist

14. The Data Data Observations Summary Statistics iPhone 4 317 iPhone Auctions Tracked 85% of the final prices for iPhone 4’s were ABOVE the retail cost of $600 (w/o contract, from Apple)

15. The Data Data Observations Summary Statistics Call of Duty CORRELATION COEFFICIENTS 97.5% of the games were sold ABOVE the $40 price at other online retailers at the time of the auction!

16. The Data Auction Duration Observations iPhone Call of Duty Auction Duration Both data sets found that THE LONGER THE AUCTION, THE HIGHER THE FINAL PRICE!

17. The Data Data Observations Shipping Costs iPhone Call of Duty CORRELATION COEFFICIENTS -.807 -.277

18. The Data Data Observations Shipping Costs iPhone EXTREME SHIPPING COSTS! iPhone Shipping Costs over $150 17 Auctions Average Total Cost= $738 Greatest Total Cost= $1,110

19. The Data Observations Seller’s Positive Feedback Percentage iPhone Call of Duty

20. The Data Use of the word “SEALED” Total Costs of items: WITH “Sealed” = $655 WITHOUT “Sealed” = $640

21. Auction Theory Applications of Auction Theory 1. Reserve Prices 2. Sniping 3. Shilling

23. CAN lead to negative consequences for sellers (Negative Ratings)

24. Should be used along with a lower minimum bid to increase revenues

26. Auction Theory BEWARE of Shilling on Ebay! SHILLING- Illegally RAISING PRICES by having bidders (hired by the Seller) use fictitious bids to bid against real bidders. Why does this continue to occur on Ebay? How can bidders AVOID being victims of Shill bidding?

27. Conclusions Tips for Ebay Users Selling Bidding -Encourage competition -Set opening bids low -No secret reserves (unless it’s a very high priced item) -Establish credibility -Discourage competition by sniping! -Beware of shillers! -Do the research

28. Auctionomics! Thank You!! Attend my econ senior seminar presentation in May to learn more! QUESTIONS?