The winner's curse, reserve prices, and endogenous entry:: empirical insights from eBay auctions

Internet auctions have recently gained widespread popularity and are one of the most successful forms of electronic commerce. We examine a unique dataset of eBay coin auctions to explore the determinants of bidder and seller behavior. We first document a number of empirical regularities. We then specify and estimate a structural econometric model of bidding on eBay. Using our parameter estimates from this model, we measure the extent of the winner's curse and simulate seller revenue under different reserve prices.