Ebay's crowded evenings: Competition neglect in market entry decisions

Research output: Indexed journal article Articlepeer-review

40 Citations (Scopus)

Abstract

Do firms neglect competition when making entry decisions? This paper addresses this question analyzing the time of day at which eBay sellers set their auctions to end. Consistent with competition neglect, it is found that (i) a disproportionate share of auctions end during peak bidding hours, (ii) such hours exhibit lower selling rates and prices, and (iii) peak listing is more prevalent among sellers likely to have chosen ending time strategically, suggesting disproportionate entry is a mistake driven by bounded rationality rather than mindlessness. The results highlight the importance for marketing researchers of assessing rather than assuming the rationality of firm behavior.

Original languageEnglish
Pages (from-to)1060-1073
Number of pages14
JournalManagement Science
Volume56
Issue number7
DOIs
Publication statusPublished - Jul 2010
Externally publishedYes

Keywords

  • Behavioral economics
  • Competitive strategy
  • Market entry
  • Marketing

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