Overview: The use of online auctions is a new distribution alternative for goods, services and information. Very few studies have examined auction sellers and their Internet marketing strategies (Becherer and Halstead 2004). This research will examine three main seller-pricing strategies and the effect these strategies have on buyer behaviour. The main seller strategies used will be low start price, medium start price and high start price. The expansion of product offerings has, according to some, driven auction prices and profits down. This would be expected when market information is easily accessible and competition increases. Informational asymmetries play an important role in online auctions for both buyers and sellers (Bajari and Hortacsu 2002) and understanding buyer differences will aid seller pricing strategies. Although average selling prices on auction sites may actually have increased” (Wingfield, 2001) it is also acknowledged that some product category prices may have fallen.
Within a product category it is likely that optimal selling strategies will be exhibited. To test this assumption a field experiment will be conducted and auction conditions will be varied and a best practice model will be developed. Optimal selling strategies are a product of both buyer and auction characteristics. The research question then, reflects the need to understand and measure differences in these buyer and auction characteristics.
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