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The Determinants of Price in Internet Auctions of Used Cars

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Abstract

This study analyzes how auction, seller, and product factors influence the price premium in an eBay used car auction market. In auctions with at least one bid, the reputation of the seller, title status, and the time the auction ended influenced the price premium on the highest bid. For auctions that resulted in a sale, cars with clear title and dealers were able to secure significantly greater price premiums, but seller reputation had no significant effect. Using a binary logit model, cars had a greater probability of selling if the seller had a better reputation. The quality of the presentation and number of pictures did not enhance the price premium in any of the models.

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Notes

  1. Although some sellers were dealers, the Kelly Blue Book dealer price was not helpful in establishing a market value because only a starting price is given regardless of condition of the vehicle. The private party transactions price varies according to the condition of the vehicle and, consequently, is more reflective of a negotiated market price.

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Authors and Affiliations

  1. Economics and Finance Department, West Chester University, West Chester, PA, 19383, USA

    Thomas Andrews & Cynthia Benzing

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  1. Thomas Andrews
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  2. Cynthia Benzing
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Correspondence to Cynthia Benzing.

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Andrews, T., Benzing, C. The Determinants of Price in Internet Auctions of Used Cars. Atl Econ J 35, 43–57 (2007). https://doi.org/10.1007/s11293-006-9045-7

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  • DOI: https://doi.org/10.1007/s11293-006-9045-7

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