eBay's Buy-It-Now Function: Who, When, and How

Abstract

This paper utilizes field experiment methodology and market data to study the “Buy-it-Now” (BIN) function in a series of eBay coin auctions. BIN auctions are typically listed by sellers with higher reputations. The probability an auction will end BIN increases with seller reputation and is not significantly affected by negative comments. Auctions listed by new sellers average lower prices and are less likely to end BIN. Buyer use of the BIN option increases as the BIN price decreases. We find that price is directly related to seller reputation, though not affected by negative comments, and is negatively related to buyer reputation. This result is driven by those auctions that start with a BIN price.