Sniping in soft-close auctions (right before the time that triggers an extension)

From Marketing Letters:

Marketing Letters

pp 1–13| Cite as

Sniping in soft-close online auctions: empirical evidence from overstock

• Authors
• Authors and affiliations

• Wen Cao, 
• Qinyang Sha, 
• Zhiyong Yao, 
• Dingwei Gu, 
• Xiang Shao

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Abstract: The existing studies suggest that sniping is an equilibrium strategy in hard-close online auctions, but not in soft-close ones. In this paper, we use a unique, large-scale data set from soft-close Overstock and hard-close eBay to document sniping phenomena under the two different closing rules. Estimation results show that sniping is prominent on both websites, but they are prevalent at different times. On eBay, sniping occurs right before the auction close, while on Overstock sniping happens predominantly in a short window of time before the triggering period, during which any additional high bid automatically extends the online auction. Furthermore, the revenue effect of sniping is significantly stronger on Overstock than on eBay.