Online Auction Research

The Internet has enabled billions of dollars of economic activity to take place on electronic marketplaces such as eBay and Ubid. This provides a fertile field for researchers such as Paulo Goes and Ravi Bapna, armed with state-of-the-art web data capturing and analysis tools, to test long-standing theoretical results from auction theory in Economics to consumer theory in Marketing. Together with colleagues at the University of Minnesota and University of Maryland , they have informed both researchers and practitioners of auctions on designing better mechanisms, optimizing auction parameters and classifying consumer-bidding strategies. Most recently, they have shown how using Internet based software agents such as Cniper.com, they can estimate hard to measure metrics such as consumer surplus accruing from online action activity. Their research approach of testing their analytical results using real world micro-level bidding data captured in real-time has yielded in a stream of research that has led to two doctoral dissertations, and several research paper in prestigious journals such as Management Science, MIS Quarterly, and Information Systems Research among others

Data Captured

This research group has designed customized software agents to track and record complete auction details from tens of thousands online auctions from as early as 1999 when such markets were in their infancy. Their data collection and parsing agent is coded in PHP and stores all relevant details about auction activity (price, number of bidders, timing of bids, bid levels, experience of participants, product characteristics, opening bid levels, etc.) in a mySQL relational database.

Examples of Interdisciplinary Research Questions Associated with Auction Data

Statistics, Economics, and OPIM:

•  Specifying the econometric distribution of consumer surplus in online auctions;

•  Carrying out functional regression analysis to understand the dynamics of online auction price curves

Marketing:

•  Clustering consumer bidding behavior to determine dominant bidding strategies

Computer Science and OPIM:

•  Developing and deploying software bidding agents such as cniper.com;

•  Developing empirically calibrated simulation platforms to test design choices of

online auctions as well as bidding strategies.

List of articles

Bapna, R., Wolfgang Jank and Galit Shmueli (both U. Maryland), "Consumer Surplus in Online Auctions,” under review in American Economic Review

Bapna, R, Goes, P., Gopal, R., Marsden J., “Moving from Data-Constrained to Data-Enabled Research: Experiences and Challenges in Collecting, Validating, and Analyzing Large-Scale E-Commerce Data, forthcoming Statistical Science (2006)

Bapna, R, Goes, P., Gupta, A., “Pricing and Allocation for Quality-Differentiated Online Services,” Management Science Vol. 51, No. 7, July 2005

Bapna, R, Goes, P., Gupta, A., "User Heterogeneity and its Impact on Electronic Auction Market Design: An Empirical Exploration," with Paulo Goes, Alok Gupta and Yiwei Jin, MIS Quarterly , 28 :1, pp. 21-43, March 2004.

Bapna, R, Goes, P., Gupta, A., "Replicating Online Auctions to Analyze Auctioneers' and Bidders' Strategies," Information Systems Research, 14 :(3), September 2003, 244-268.

Bapna, R., "When Snipers Become Predators: Can Mechanism Design Save Online Auctions?" Communications of the ACM , 46: 12, pp. 152-158, Dec. 2003.

Bapna, R, Goes, P., Gupta, A., "Analysis and Design of Business-to-Consumer Online Auctions ," Management Science, 49: (1), 2003, 85-101.

Bapna, R, Goes, P., Gupta, A., Gilbert Karuga, "Optimal Design of the Online Auction Channel: Analytical, Empirical and Computational Insights,” , Decision Sciences, 33 :(4), Fall 2002, 557-577.

Bapna, R, Goes, P., Gupta, A., "Online Auctions: Insights and Analysis," Communications of the ACM, 44 :(11), November 2001, pp. 42-50.

Bapna, R, Goes, P., Gupta, A., "A Theoretical and Empirical Investigation of Multi-Item On-line Auctions,", Information Technology and Management , 1 : (1), 2000, 1-23.