Study Confirms Value of Last-Minute Bidding

Forward-looking auctions have made consumers "craftier," says study; "There's no reason to commit to a bid until the very end."

The forward-looking apsect of online auctions benefits the ever-crafty consumer with last-minute bidding an effective strategy. That is just some of what trend watchers, bargain hunters and avid eBayers will glean from a just-published study called "Forward-looking Bidding in Online Auctions" by Prof. Robert Zeithammer of the Chicago Graduate School of Business.

Published in the Journal of Marketing Research with its findings reported today by U.S. News & World Report, the study asked, "What happens when the role of an auction changes from selling unique items at Sotheby's to driving large markets for consumer goods on eBay?" The answer, according to Zeithammer, is that "consumers get craftier and craftier," using the forward-looking nature of online auctions to get the best deal.

"Having information about future auctions changes how bidders should behave," says Zeithammer. "Bidders should take the entire known set of auctions into account. If they lose the current auction, they can still bid in future auctions selling similar products, whereas in the Sotheby's world, if I lose at an auction for a unique Renoir painting, I go home empty-handed and my bidding is over."

The study confirms a practice among many savvy buyers: last-minute bidding. "There's no reason to commit to a bid until the very end," Zeithammer says. Conversley, "Sellers should be careful when formulating their own strategy, avoiding the sale of the same items back to back."