Internet Auctions and their
Economic leverage
Table of content:
1. Introduction
2. Internet auctions
2.1 Electronic marketplaces
2.2 The process of price determination
2.3 Impact on supply and demand
3. Benefits and disadvantages
3.1 The results for supplier and consumer surplus
3.2 Opportunities of fraud
4. Conclusion
5. References
6. Figures
1.Introduction
In recent years the availability of the internet has increased at a rapid pace and almost everyone in the western world has now access to the internet in some way. In accordance with the growing accessibility of the internet, the use of electronic market places, especially of internet auction platforms, has become more and more popular. Particularly small businesses and consumers started to engage in auctions on platforms like e-Bay and OnSale. e-Bay's company update (06. 2006) shows that they currently have 203 million registered users around the globe, which is a market share of 85 % (Alberta E-Future Centre, n.d.) and among those are thousands of non professional sellers making their living with sales on e-Bay. The questions arising from this new way of conducting business is, if it is efficient or not.
This paper will give an answer to this question taking e-Bay as a representative for the whole Internet auction industry. First it will define what electronic markets are and what position internet auctions have among those. Subsequently a brief description of how internet auctions work, what the ...