Search

Promotional upgrades to auction listings are now a ubiquitous feature of auction Web sites. We examine 705 auctions of a single consumer-electronic product on eBay and test whether use of various promotions results in a greater probability of sale or a higher realized price. We find that promotions that focus on display enhancements, such as border, bold, or highlight, are not worth the cost. However, the subtitle promotional tool is effective and worth the cost. We also find interesting results regarding seller reputation: although seller reputation does not increase the probability of a sale overall, it can result in higher realized price if a reputable seller is selected. Implications for promoting on eBay are discussed. [ABSTRACT FROM AUTHOR]

This study draws on signaling theory to test whether seller and product characteristics impact the use of display-type versus informational-type promotion on eBay. The authors predict that display-type promotion is used by less-experienced sellers who cannot promote on the basis of their own seller ratings. The authors predict that experienced sellers, on the other hand, prefer informational promotion since their high ratings make seller-provided statements more credible. In addition to seller characteristics, the authors predict that product characteristics, such as price and product condition, also impact promotion. It is expected that higher prices drive greater investments in display-type promotions overall, even if such promotion is less effective. Finally, it is hypothesized that the better the condition of the product, the greater the use of informational promotion since this kind of disclosure is especially influential. The hypotheses were tested using a large data set of auction data from eBay and received excellent support. Implications and directions for future research are discussed. [ABSTRACT FROM AUTHOR]