Examining Interdependencies between Seller’s and Buyer’s Strategies in Online Auctions: (The Case of Seller’s Choice of Auction Duration)

In online auction research, sellers’ and buyers’ strategies have been largely examined as separate research streams and the interdependencies inherent in their strategies to understanding price premium and buyer behaviors have not been adequately explored. This deficiency is a serious limitation since an integrative approach could build the conceptual bridge necessary to provide sellers with a deeper understanding of how to achieve desired auction outcomes. Consequently, the present study integrates these two perspectives by proposing that seller auction duration strategy impacts bidders’ strategy, their winning likelihood, and their financial outcomes. Results from cluster analysis and ANCOVA support our model, showing that different auction durations attract different types of bidders. Auctions with shorter durations were found more attractive to those buyers attempting to keep monitoring cost low, while longer durations appeared to be more attractive to those benefitting from observing other bidders’ actions. The paper concludes with implications for research and practice