Late bidding, bidder categories and network externality effects: a preliminary examination of online auctions

Auctions are emerging as an important Internet application for price discovery and trading. The Internet also enables new types of auction formats and creates a venue to observe and study new auction models. In this paper we hypothesize that the pattern of online bidding is impacted by network externalities, relative price level, and auction duration. We also hypothesized the context of the auctions and the types of the bidders affect the impact of these incentives on bidders´ behavior. Real transaction records of a special on sales section on a popular auction site in Hong Kong were collected to test these hypotheses. Preliminary results from our study suggest that the impact of network effects, relative price, and time period are affected by the context of the auctions and types of bidders.