eBay and Online Auctions Case Analysis (Essay Sample)

Name: Instructor: Course: Date: eBay and Online Auctions Case Analysis Introduction eBay is a kind of absolute online auction that deals with goods that are sold in an auction format are often sold to the highest bidder. On the contrary, if one fails to pay their maximum bid, they could lose out to someone who cast a similar maximum bid earlier than they did. For that reason, knowing how the bidding process is carried out could keep one from overspending. When a client makes a bid on eBay, they are not, in reality, placing a sole bid, but are instructing eBay to bid automatically on their behalf up to the maximum they intend to offer. Afterward, the client’s maximum bid is kept a secret, no sellers and buyers can view a customer's maximum bid while they are winning an auction. One's maximum bid can only be revealed if one out competes and no longer in the lead. Online Sellers eBay online sellers joined the auctioning market to fill a gap in the void of online marketing. It happened at a time when the selling body was intentionally taken off the eBay list. At that point, the eBay list was made up of 347 transactions for the user mentioned above where 2677 were only sales and purchases were 802.The implication of these numbers affirms that open bids and possible use of secret reserves are the fundamental aspects to sellers. However, most eBay sellers obtain that sort of feedback rarely. These indicate that sellers as a player in e-bay auctioning is protected from letting items go at cheaper prices. Mimicking Legitimate Sellers. Information concerning negative feedback from the eBay suggests a cluster appearance in the process of auctioning. In an attempt to analyze the value of items misrepresent by e-bay sellers, it is challenging since the entity retains a 90-day rule basis thus making certain data inaccessible. On the other hand, several references trapped in a reputational feedback show that eBay sales items included Cybershot and Mavica, headphones, batteries and laptop computers (Lee, et al. 28). Manipulative Feedback. Analysis on the online sellers also reveals engagement of sellers in buying some ratings to inflate feedback. In this case, most sellers engage in positive comments on items to inflate the number of buyers interested on the items. Again, while it is understandable that similar individuals who won several auctions from eBay, it is also imperative to assert that most sellers posted positive feedbacks to increasing the ratings of the auction process. Feedback postings are significant because they help the sellers know what they should improve on and what part of the products to put away. On the whole, it helps in product improvement. Essentially, about 28 new evolutions of feedback sum to another page of inflated responses. Moreover, this page fills in a concealment that replicates the past negative responses. However, on the chance that the evaluated pages sum up to about 100 plus, it is likely that very few buyers will involve in the bidding process for such items. Consequently, an opportunity is disclosed for auctioneers that enable them to rebuild an already disintegrated feed system; hence, availing an opportunity for fraudsters to thrive. Nonetheless, for the buyers who concentrate in surveying the last pages of the auctioning process, the system annuls reliable notoriety. Buyers The bidders, in this case, are online buyers. They are prone to cases of deception. Ultimately, it is pointed out that amid the viable time of extortion. The auctioneer responded to the adverse feedbacks with explanations. On the whole, the eBay auction strives to increase user satisfaction. At this point about 3,400 transactions is recorded annually for an estimated 2500 users of which 76 percent are sales, only 23 percent amounted to purchases. Under the sales category, a total of 240 registers negatives feedback accounting for about 9% of the total auctioning process. Imperatively in analyzing this sample, 91% of the sales register positive feedback; however, a 9% negative auction posting for e-bay is an extremely high level.The overall feedback on e-Bay online sellers is about 94%, and uniform auctioning evaluation mostly inflates it. Another important quantitative analysis on online auctioning is to find out the active period of users accounts. In e-Bay, most of the sellers’ accounts are only active for about 8 years translating to 32 quarters. The active online accounts analysis when computed to the feedback, suggest that about 4.5% online feedback is received annually in 6 quarters. 4. Auction rules The online auctioning at e-bay has defiantly taken over the market ratio as compared to the Yahoo and Amazon. Comparatively, these benefits are due to the auctioning rules that govern both the sellers and buyers of e-bay. First is the start and ending cluster snipers rule that categorizes bidders depending on the bids placement. In this case, each bidder is numbered for instance as bi: b1; b2; b3; bn. Consequently, their bids evaluated through the bidding strategic of function b (v) = b. Further, the bidders are also protected from the bidding war through optimal bidding strategy that grants them the opportunity to re-bid a different item in case they change their mind after the first bid. The most specific element that e-bay employee is the use of Symmetric Bayesian Nash Equilibrium. Does it meet Theory? The internet auction such as that of e-Bay has introduced asymmetry gap between the sellers and the buyers thus creating numerous difference between the traditional and contemporary auction forms. Some of the key elements that compound internet auctioning market include the inability to view physically items, lack of professional evaluation of goods, as well as immediate acquisition of items; these elements reduces vale evaluation compared to price. These can be demonstrated by subtracting price from the value (V- P). Further, this increases chances of vulnerability to the sellers who are supposed to be the basis of the auction process. These two modes of payment and the fact that the buyers and the seller are anonymous limits risk neutrality; hence, the independent value model of auctioning is jeopardized. Moreover, the bidder valuations at e-bay do not inform of possible other bidders; thus, most subsequent bidding process is often based on irrational trial and era. Contrarily, in the common value model, the items presented for auctioning should pose identical prices for all bidders and sufficient information regarding the items. These are meant to dictate a common ground for bidding by providing the customer with any relevant data to aid bidding. However, in e-Bay, the common value model does not adhere. For example, some goods and services that are placed for bidding cannot be quantified physically. Therefore, this sets a motivating force for the danger inclined or unpracticed purchase, which they would like to buy the item cheaply, betting that in their situation the item will be transported and received. Further, the concept of equilibrium bidding in e-Bay is not followed by both the sellers and the buyers. In fact in some product...