Auction or agent (or both)? A study of moderators of the herding bias in digital auctions

Recent research has shown that buyers in digital auctions are susceptible to the herding bias-gravitation toward listings with existing bids and inconsideration of listings without any bids, manifested in categories of listings that are either coveted or entirely overlooked by buyers. This article investigates two specific types of moderators of herding bias: auction attributes (volume of listing activity, and posting of reservation price) and agent characteristics (seller and bidder experience), and increases our understanding of mechanisms underlying this bias. Practical implications for participants and organizers of digital auctions are discussed, and promising future research opportunities are highlighted. (C) 2002 Elsevier Science B.V. All rights reserved.