Quantifying Consumer Interest and Consumer Valuation from Buy-It-Now Offers

An item offered in the buy-it-now offer (BINO) format is sold to the first consumer who is willing to pay the asked price. The lifetime of a BINO, therefore, depends on how many consumers are interested in the item and on how much they value it. In this paper, we model this dependency by combining survival analysis and auction theory. Our model enables sellers to quantify consumer interest and consumer valuation for their items from observing BINO lifetimes only. Further, the influence of covariates (e.g., the item condition) can be investigated. To demonstrate this, we apply our model to a dataset that we have collected from eBay. The dataset consists of 1,821 BINOs of a single product, the iPhone 5S. For this example, we find a new item to attract, on average, 1.26 consumers per day, who have a mean valuation of 384.97 EUR

From social network to firm performance: The mediating effect of trust, selling capability and pricing capability

Purpose – The purpose of this study is to develop a structural equation model to explain the complex relationship between social network and firm performance by introducing the mediating role of trust, selling capability and pricing capability. Design/methodology/approach – The research model with hypothesis development was derived based on the literature. To provide empirical evidence, this study carried out a survey in which the data were equated with a list of questionnaires with a random survey of 380 small and medium enterprises (SMEs) in the Indonesian context. Findings – This study indicates that the use of social media in management process will not affect the increasing firm performance unless the firms build trust upon social networks. The social network with trust allows the firms to gain a pricing capability and a selling capability, which brings a positive impact on firm performance. The results also show that the selling and the pricing capabilities become essential following the utilizing the social media, which concerns on trust building. Research limitations/implications – This study focused on the small-to-medium context, which has conventionally provided an exemplary site for the development of social capital theory but raises issues of generalizability across different contexts. Practical implications – For the managers, it is advisable to encourage their employees to consciously exploit the selling capability by enhancing the business networks via social media to achieve the firm performance. Originality/value – This paper contributes to the social capital theory by explaining the mediating role of trust in the complex relationship between social network and firm performance. This study provides evidence that trust plays a pivotal role in social networks, which enable the observed firms to achieve the performance

Auction versus posted price mechanisms in online sales: The roles of impatience and dissuasion

If all potential buyers participate in a first-price auction, then (theoretically) the auction price weakly exceeds the price placed by the seller under a posted price mechanism. However, it is documented that in online sales sellers prefer posted price mechanism to auction. We aim to explain this empirical contradiction in terms of partial participation of the buyers in auction, prompted by impatience and dissuasion. Auction on Internet often requires waiting, and hence, many impatient participants may not join the auction process. Furthermore, a previous experience of failure in auction may also prompt buyers’ non-participation. We show, theoretically, that in the case of partial participation, the price in auction may be lower; posted price turns out to be payoff dominant for both the buyers and the sellers. We then run a laboratory experiment and verify the presence of impatience (through waiting cost) and dissuasion factor (through previous failure) among the subjects