The Impact of eBay Ratings and Item Descriptions on Auction Prices: A Comparison of Designer Watches and DVDs

Abstract

Buyers on eBay commonly rely on seller feedback ratings to determine bidding strategies.  Various studies have examined the impact of eBay’s reputation system on auction outcomes.  This study builds on prior research by examining the relationship between seller ratings on auction prices for two distinct product types, DVDs and designer watches and by benchmarking the bid prices against retail prices. The results show that eBay ratings explain a greater degree of price variation in Designer Watches than in DVDs.  The study also suggests that high quality product listings with such features as digital images, formatted pages, and product details may result in higher bid prices.