The effect of buyer's gender, risk‐proneness, and time remaining in an internet auction on the decision to bid or buy‐it‐now
| Pages | 356-365 |
| Published date | 22 August 2008 |
| Date | 22 August 2008 |
| DOI | https://doi.org/10.1108/10610420810896112 |
| Author | Omar Shehryar |
| Subject Matter | Marketing |
Pricing strategy & practice
The effect of buyer’s gender, risk-proneness,
and time remaining in an internet auction on
the decision to bid or buy-it-now
Omar Shehryar
College of Business, Montana State University, Bozeman, MT, USA
Abstract
Purpose – This paper aims to study how buyers’ gender and risk proclivity, and the time remaining in an internet auction, influence whether buyers buy
at fixed prices or bid.
Design/methodology/approach – The study is based on a simulated internet auction. Participants choose between bidding in an auction and buying
at a fixed price. Data are analyzed using a logistic regression model. The results from the laboratory study are validated with data from eBay.com.
Findings – Female participants’ odds of choosing the buy-it-now (BIN) option are higher than their odds of bidding in an auction (BID) when less time
is remaining in an auction. Contrarily, for males, when less time is remaining, BID is preferred over BIN. Unexpectedly, when substantial time is
remaining, males have greater odds of choosing BIN over BID except when they are high risk-seekers. Simulation results correspond closely with eBay
data.
Practical implications – The paper shows that not only do gender differences manifest themselves in ways that are to be expected, such as females
being more risk-averse than males, but that competitiveness among males may lead to an uncharacteristic choice to buy at fixed prices if substantial
time is remaining in an auction. Furthermore, the latent competitive nature of females is revealed by secondary research. Finally, the research validates
laboratory results with field data to practice methodological triangulation.
Originality/value – A comparison of determinants of bidding versus buying at fixed prices is missing from the extant literature. The present study fills
this gap.
Keywords Auctions, Internet shopping, Gender
Paper type Research paper
Introduction
Internet auctions have become increasingly popular since
their inception in mid-1990. In the US alone, close to a half
million full- and part-time entrepreneurs make a living buying
and selling a wide variety of products on eBay’s US website
(Ennico, 2004). Notwithstanding the success of the auction
format, a large number of internet shoppers choose not to bid
in an auction and prefer a fixed-price format. The importance
of the segment of buyers that prefers a fixed-price option over
bidding in an auction can be ascertained from reports that
attribute 30 percent of the sales volume on eBay to
transactions completed by exercising the buy-it-now (BIN)
option (Fortunato, 2005). Other online auction websites such
as Yahoo!and uBid.com also cater to buyers interested only in
merchandise offered at a fixed price by offering sellers a
choice to list an item with a BIN price in addition to the
default bid-in-auction (BID) format.
Given that a substantial proportion of online auctions is
completed using a BIN option, a study of what factors sustain
a BIN option in online auctions is pertinent. The results of
this research suggest that a BIN-versus-BID choice is
influenced by a buyer’s gender, as well as by time remaining
in an auction. The results also suggest that a buyer’s gender
and time remaining in an auction interact with a buyer’s risk-
proneness to influence a BIN-versus-BID choice.
Since extant pricing research conventionally focuses on
fixed prices in a retail setting, comparisons of fixed versus
dynamic pricing do not arise. However, considering the
continuing prevalence of dynamic price scenarios researchers
suggest that the question of when and why buyers choose
fixed versus dynamic price is fundamental and worthy of
investigation (Park and Bradlow, 2005). Therefore, the results
of this study contribute to pricing research by offer ing a better
understanding of when to offer a BIN price in addition to or
in place of a BID option.
The following sections state the background for the current
study and provide a theoretical rationale for the hypotheses
that are tested with an experiment as well as secondary
research. The theoretical and practical significance of the
results is discussed and the limitations of the research are
acknowledged.
The current issue and full text archive of this journal is available at
www.emeraldinsight.com/1061-0421.htm
Journal of Product & Brand Management
17/5 (2008) 356–365
qEmerald Group Publishing Limited [ISSN 1061-0421]
[DOI 10.1108/10610420810896112]
356
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