Bid shading and diminishing marginal reputation effects in online auctions

  • nathan. yang
  • Published 2007


This paper explicitly tests for bid shading behavior in eBay auctions under the equilibrium concept of second-price auctions with common valuations and endogenous entry. Aided by flexible estimation techniques, the dynamics of eBay’s reputation mechanism is confirmed to closely mimic that of Sporas trust systems. The key finding is that bidders reduce their… (More)

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