Internet Auctions
-Competition on the German market and the advantage of auctioning rare goods-
Table of contents
Introduction???...?????????????????????......................2
1.) What internet auction types exist?
2.1.) Description of Hood as eBays largest German competitor???????.?....3
2.2.) The impact of seller's reputation on buying behaviour exemplified on Hood?..4
3.) Application of economic theory???????????????.?????..5
Conclusion??????????????????????????????....6
References???????????????????????????????8
Introduction
Every purchase causes a meeting of demand and supply, of buyer and seller. This can take place in several forms, in a traditional exchange of money for a product or service, or in an auction. With the development of the internet, the online auction was created and the first one started operating in 1995 (Pinker, Seidmann and Varkant, 2003). In traditional auctions, as well as on the online auction market, buyers bid to get the lowest possible price, while sellers offer their products to get the highest reservation price of the buyer. Indeed this seems paradoxical at first sight, but auction houses and especially internet auctions are, and tend to become even more successful. They are the best indicators for the changes to "business inherent in e-commerce" (Pinker et al., p.1457). In an online auction, the exchange of value takes place on a virtual basis, providers offer a platform, the virtual marketplace, for the transactions. "They must communicate supply and demand orders, transform these orders into transactions, and provide sufficient liquidity for the market" (Pinker et al., p.1478). The probably best known and worldwide largest online auction mark ...