What is it about?

Since auctions are dynamic and since the current winning bid progresses over time, the authors study time dependency over the course of an auction with hazard function models. To account for unobserved heterogeneity, the paper uses a latent class approach, which identifies bidder segments based on both observed and unobserved factors.

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Why is it important?

The findings show significant heterogeneity across bidders, revealed by their varying degrees of propensity to switch across auctions. The three segments of bidders are The Inerts – about 30 percent, The Switchers – less than 10 percent, and The In‐Betweens. According to the findings, bidders can induce other bidders to switch to a concurrent auction by responding quickly to the current high bid. Moreover, the paper finds a surprisingly high degree of inertia and reluctance to switch towards the end of the auction when bidding is most critical.

Perspectives

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Professor Peter T.L. Popkowski Leszczyc
University of Alberta

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This page is a summary of: Determinants of elapsed time to switch between auctions, Journal of Research in Interactive Marketing, June 2012, Emerald,
DOI: 10.1108/17505931211265417.
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