Do you want to get a higher price when you sell something at auction on eBay?

After running hundreds of controlled auctions on eBay, researchers reported in the INFORMS journal Decision Analysis that longer auctions yielded more bidders and more bids resulting in an 11% average final price increase compared to the shorter auctions.

When you sell an item on eBay, you can choose auction durations ranging between 1 and 10 days. The researchers studied the differences between 1 and 3 day auctions by auctioning identical items simultaneously with one item in a 3-day auction and the other in a 1-day auction, but both ending on the same day. The also ran an additional 241 control auctions in which the durations for the identical item pairs were the same.

In total, there were 1,223 unique bidders and only 202 of them placed bids simultaneously in a paired auction. Interestingly, they analyzed their data set to see if the higher prices from longer auctions could be attributed to more bids and/or more bidders, but they found that could only partially explain the results.

They also conducted another set of studies on local auction sites with similar formats as eBay, but that had much smaller groups of potential participants. These studies compared auction durations of 1 day versus 10 days. Here they found the opposite effect: shorter auctions resulted in average final prices that were 16% higher than the longer auctions.

The authors caution that these studies are not directly comparable due to a variety of differences in experimental controls and design considerations, and should be therefore be considered primarily as “two separate investigations of the effect of duration on prices in two auction platforms.”

The study was authored by Ernan Haruvy, from the University of Texas at Dallas, and Peter T. L. Popkowski Leszczyc, from the University of Alberta, Edmonton.

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