Template-Type: ReDIF-Paper 1.0 Series: Tinbergen Institute Discussion Papers Creation-Date: 2008-04-17 Number: 08-041/2 Author-Name: Laurens de Haan Author-Workplace-Name: Erasmus University Rotterdam, and University of Lisbon Author-Name: Casper de Vries Author-Email: email@example.com Author-Workplace-Name: Erasmus University Rotterdam Author-Name: Chen Zhou Author-Email: firstname.lastname@example.org Author-Workplace-Name: Erasmus University Rotterdam Title: The Extent of Internet Auction Markets Abstract: See also the publication in the Journal of Economic Theory.
Internet auctions attract numerous agents, but only a few become active bidders. A major difficulty in the structural analysis of internet auctions is that the number of potential bidders is unknown. Under the independent private value paradigm (IPVP)the valuations of the active bidders form a specific record sequence. This record sequence implies that if the number n of potential bidders is large, the number of active bidders is approximately 2 log n, explaining the relative inactivity. Empirical evidence for the 2 log n rule is provided. This evidence can also be interpreted as a weak test of the IPVP. Classification-JEL: D44 Keywords: bids as records; number of active bidders File-Url: http://papers.tinbergen.nl/08041.pdf File-Format: application/pdf File-Size: 329359 bytes Handle: RePEc:tin:wpaper:20080041