“Bid more, pay less” – overbidding and the Bidder’s curse in teleshopping auctions

This paper provides a theoretical and empirical analysis of the multi-unit Dutch teleshopping auctions of 1–2–3.tv. There are two channels for sales transactions: Customers either bid in the teleshopping auctions or purchase in the online shop for a simultaneously available fixed price. Our theoreti...

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Bibliographic Details
Published inElectronic markets Vol. 28; no. 4; pp. 491 - 508
Main Author Ocker, Fabian
Format Journal Article
LanguageEnglish
Published Berlin/Heidelberg Springer Berlin Heidelberg 01.11.2018
Springer Nature B.V
Subjects
Auctioning
Bids
Business and Management
Customers
e-Commerce/e-business
Electronic commerce
Empirical analysis
Information technology
IT in Business
Purchase intention
Research Paper
Sales
Telephone calls
Teleshopping
Transactions
Search cost
Bidder’s curse
D12
D44
Multi-unit auction
Online auction
Teleshopping auction
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Summary:This paper provides a theoretical and empirical analysis of the multi-unit Dutch teleshopping auctions of 1–2–3.tv. There are two channels for sales transactions: Customers either bid in the teleshopping auctions or purchase in the online shop for a simultaneously available fixed price. Our theoretical analysis indicates that profit-maximizing customers do not overbid the fixed price, since they risk experiencing the Bidder’s Curse: Buying at a uniform auction price that is higher than the fixed price. Our data set includes nearly 700,000 recorded bids. We find that customers overbid in 26% of all bids, but the Bidder’s Curse only occurs in 5% of all auctions. Offline-bidders (telephone calls) overbid both by larger amounts and more often than do online-bidders (website or app), and, on average, the most frequent customers do not experience learning effects.
ISSN:1019-6781
1422-8890
DOI:10.1007/s12525-018-0295-4