An empirical analysis of consumer behavior in the online auction marketplace

The purpose of this paper is to analyze a unique data set pertaining to eBay auctions, in particular auctions of the first generation iPad. This analysis will give some interpretations about consumer behavior in the consumer electronics market on eBay, especially how the reputation of sellers and the shipping price that sellers charge affects the final selling price of an item. Other economics variables are analyzed to provide a broader picture of pricing determinants. Reputation is an important mechanism to consider in any market. However, reputation in the eBay market is particularly important because buyers do not interact with the sellers and do not physically handle the products. The paper finds that reputation is an important factor in the final selling price of auctions on eBay.