Pennies from eBay: the Determinants of Price in Online Auctions

This paper presents an exploratory analysis of the determinants of prices in online auctions for collectible United States one-cent coins at the eBay Web site. Starting with an initial data set of 20,000 auctions, we perform regression analysis on a restricted sample of 461 coins for which we obtained estimates of book value. We have three major findings. First, a seller’s feedback ratings, reported by other eBay users, have a measurable effect on her auction prices. Negative feedback ratings have a much greater effect than positive feedback ratings do. Second, minimum bids and reserve prices have positive effects on the final auction price. In particular, minimum bids appear only to have a significant effect when they are binding on a single bidder, as predicted by theory. Third, when a seller chooses to have her auction last for a longer period of days, this significantly increases the auction price on average.


First version: November 1999 (Download the original, longer version.)

This version: May 2006

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