KD Consulting MR Vacancies



First Online Auction Research to Commence
21/2/01



To date, few academic studies have been undertaken on the economics of the Internet in the UK. In response to this, FairMarket UK (an e-business solutions company) is taking matters into its own hands. It has announced that it will be conducting a study into the workings of online auctions in a partnership with the Centre for Economic Performance (CEP) at the London School of Economics.

The new research, timetabled for the remainder of this year, is believed to be a pioneering look at how consumers behave in online auctions. Its aim is to explore how the design and format of Internet commerce models affect the outcome of auction transactions. To this end, the research will determine the most efficient online commerce strategies and establish which auction models might therefore become dominant.

The Fairmarket and CEP partnership should enable the project to draw on CEP’s numerous existing auction models, used here in the context of "laboratory conditions". The research will be able to set up auctions to test, to put a variety of goods up for auction, and to assess auction pricing in action.

The project designers hope that the results will be able to address a number of key online auction issues:

  • What attracts someone to use an auction?
  • Why do people like to bid at the last minute before an auction closes?
  • Why do people use different types of auctions?
  • How does the number of people entering a bid affect the auction?
  • Do certain objects sell better at auctions than others?
  • What would be the ideal auction model?

Commenting on the purpose of the new research, Eileen Rudden (president and chief executive officer of FairMarket) noted that, "This research will set an important benchmark for understanding consumer behaviour in online dynamic pricing formats like auctions. The CEP study will bring academic rigor to theories surrounding this rapidly growing e-commerce segment."

Professor Richard Freeman, co-director of CEP, added that, "FairMarket's agreement with us will enable our team to execute the research through our own site and other participating sites in the FairMarket Network UK. The ability to do this allows us to research an area, that at present, is only really understood by auction experts working in the industry."