Factors Affecting the Outcome of the Auction by the Example of EBay

In recent years online auction market has experienced an enormous growth and a rise in popularity among consumers from all over the world. This Bachelor’s thesis focuses on auction and user’s profile features that affect final prices of the auctions on eBay.com. The main aim of the paper is to determine factors that influence the auction outcome and to explore their impact. The framework of the study includes determinacy of eBay online auction type and its peculiar characteristics. Previous literature considered seller’s reputation, auction length, opening bid and the number of bids as features that make a significant impact on the final price of the online auction. Together with the listed factors this paper tests several other determinants of reputation system. All the concepts form seven hypotheses that are tested using regression analysis. The data set used in the research consists of 205 successful auctions of iPhone 6 16GB mobile phones collected from eBay website from March 2017 to May 2017. The main findings from the conducted empirical analysis indicate that seller’s overall rating and user’s feedback score as a seller have a significant positive impact on the final auction price. An increase in the size of the starting bid also causes a rise of the selling price, while the impact of the number of negative feedbacks results in a decrease of a winning bid. Contrary to existing research on the online auction theme this paper does not find evidence of significance of the auction length and the number of positive feedbacks in relation to price. The percentage of positive feedbacks for the year does not influence the auction outcome as well. All in all, evidence suggests that it is reasonable for a user to maintain a high reputation score, avoid negative comments and set a reasonably high open bid when starting an auction.