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E-Folder - Starting Low and Ending High in eBay Online Auctions
It is the often said that ?0.99 no reserve auction are the best way to encourage bids and lead to higher prices. In fact Auctioning4u eBay Drop Off Shop lists most of its items using this pricing strategy. However up to now this theory was mor
According to USFDA, a combination product is one composed of any combination of a drug and device; biological product and device; drug and biological product
e anecdotal than based on actual data.
A recent paper by Gillian Ku of London Business School, Starting Low but Ending High: A Reversal of the Anchoring effect in Auctions has investigated the effect of starting price on the final value of on
A recent paper by Gillian Ku of London Business School, Starting Low but Ending High: A Reversal of the Anchoring effect in Auctions has investigated the effect of starting price on the final value of on
; or drug, device, and biological product and fixed dose combination would include two or more combinations of drug.
Examples of combination products may in
Examples of combination products may in
line auctions and discovered that it is indeed the case that low starting prices increase ending price. Ku et al have discovered that three effects of lower starting prices lead to higher ending prices:
* Lower starting prices reduce barriers
* Lower starting prices reduce barriers
lude drug-coated devices, drugs packaged with delivery devices in medical kits, and drugs and devices packaged separately but intended to be used together.
to entry, which increases bids and generates higher prices
* Lower starting prices entice bidders to invest time and energy, increasing their commitment to the auction
* The extra bids generated by lower starting prices infer value in the it
* Lower starting prices entice bidders to invest time and energy, increasing their commitment to the auction
* The extra bids generated by lower starting prices infer value in the it
here is enormous increase in the number of combination products entering the market in the recent years. Combination products have proven advantages but fixe
em, encouraging more traffic
These findings are at odds with previous research on negotiations which finds that ending prices were highly related to starting price. In the more social environment of auctions (especially online auctions such a
These findings are at odds with previous research on negotiations which finds that ending prices were highly related to starting price. In the more social environment of auctions (especially online auctions such a
d dose combinations are still in the process of convincing regulatory authority on their advantages over the single ingredient formulations.
Combination pro
Combination pro
s eBay), this trend is reversed. Ku performed six studies to investigate the effect of starting price on ending price, several of which were related to eBay (these are studies 2, 3 and 5 detailed below).
Study 2: Starting low and ending high
ucts have become life saving products for the pharmaceutical companies who doesn’t have many innovative molecules in their product pipeline and have been inc
n eBay
The results of eBay online auctions were analysed to establish the relationship between staring and ending prices. For this study, two types of auctions were identified:
* Independent value auctions. These are highly individual auctio
The results of eBay online auctions were analysed to establish the relationship between staring and ending prices. For this study, two types of auctions were identified:
* Independent value auctions. These are highly individual auctio
easingly used in the product life cycle management. Even the companies having product patents are trying to extend their product life cycle through the combi
ns where the price is difficult to predict e.g. collectibles
* Common value auctions. Auctions of common items where there is a market price.
For the independent value auctions they choose to analyse Tabriz Persian rugs and for the common va
* Common value auctions. Auctions of common items where there is a market price.
For the independent value auctions they choose to analyse Tabriz Persian rugs and for the common va
nation products and maximize the revenues. But the companies involved in this practice are overlooking that they are burdening the patients both economically
lue auctions Nikon digital cameras. The following results were found for both types of auction
* Lowers starting price auctions were more likely to be successful
* Lowers starting prices auction results in more bids and more unique bidders.
* Lowers starting price auctions were more likely to be successful
* Lowers starting prices auction results in more bids and more unique bidders.
and physically. They need to rightly judge the benefits of the combination products and they have to even look at the risks involved when combining the produ
* Lower staring prices resulted in higher ending prices
Study 3: Escallation of Commitment on eBay
This study set out to investigate the effect of escalation of commitment on prices rises. Is it the case that once the bidder has placed a bid
Study 3: Escallation of Commitment on eBay
This study set out to investigate the effect of escalation of commitment on prices rises. Is it the case that once the bidder has placed a bid
ts. Some of the combination products were well accepted by physicians while others suffered. Companies involved in development of combination products are fi
they have invested time and are more likely to bid again?
Ku et al focused their attention on a particular eBay seller, Browncow, who sells Hawaiian shirts starting at $9.99 and $24.99. Analysing the results of 89 auction produced the follow
Ku et al focused their attention on a particular eBay seller, Browncow, who sells Hawaiian shirts starting at $9.99 and $24.99. Analysing the results of 89 auction produced the follow
ding difficulty in defining their combination products and facing various challenges from selecting a combination to marketing it.
Following aspects would a
Following aspects would a
ing conclusions
* Low staring prices bring bidders into the auction early
* Low starting prices encourage bidders to accumulate sunk costs into the auction. Low starting price winners have spend more time in the auction and make more bids th
* Low staring prices bring bidders into the auction early
* Low starting prices encourage bidders to accumulate sunk costs into the auction. Low starting price winners have spend more time in the auction and make more bids th
dd to the challenges in developing combination products:
Which markets to tap where the combination products can do fairly well?
Which combination prod
Which markets to tap where the combination products can do fairly well?
Which combination prod
n low starting price losers or bidders in high starting price auctions.
Study 4 Inferring value from Traffic and Current Prices
Test subjects were asked to judge the proper value of an mocked-up eBay item (holiday package) with which they we
Study 4 Inferring value from Traffic and Current Prices
Test subjects were asked to judge the proper value of an mocked-up eBay item (holiday package) with which they we
cts are meaningful and rational?
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
Which therapeutic categories to select?
Which Combinations can address unmet needs of the patients?
Do combin
re presented. It was found that the number of bids which the items had lead to higher valuations.
Study 5 Starting Low and Ending Low on eBay
This study found that for auctions where there were less bids, the starting price did have an effec
This study found that for auctions where there were less bids, the starting price did have an effec
tions increase the patient compliance?
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
What would be the developing cost?
How to tackle the risks encountered during combination product developmen
t on ending price. By comparing the outcome of similar items where there were misspellings in the titles, it was found that this created a barrier to auction traffic, reducing final prices
Lessons from research
The results of this research w
The results of this research w
t?
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
As combination products don't fit into the traditional categories of drugs, medical devices, or biological products, the USFDA is in the process of devel
ll not come as much of a surprise to eBayers, but it is nevertheless interesting to have analysis to back up commonly quoted conceptions. I think that the following lessons can be drawn from the paper:
* ?0.99 NR auctions work well for popula
* ?0.99 NR auctions work well for popula
ping new procedures for reviewing their safety, efficacy and quality.
Professional from academic institutions, pharmaceutical industries, health care indust
Professional from academic institutions, pharmaceutical industries, health care indust
r items with plenty of search traffic and lead to higher prices
* Less popular items (rare) are not suitable for this kind of auction strategy.
I think that the results of this research are most relevant to individual sellers, selling in low
* Less popular items (rare) are not suitable for this kind of auction strategy.
I think that the results of this research are most relevant to individual sellers, selling in low
y and representatives from various regulatory agencies are working out to design the regulatory requirements for manufacture and sale of combination products
volumes with using simple sales strategies. When selling in large volumes, the market prices will drop if too many items are listed and it is therefore necessary to increase starting prices or use fixed price auctions to compensate.
Comments
.
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
As there is an increasing trend of the combination products companies manufacturing such products should be able to tackle the problems involved in the de
on the Research
There are many factors affecting the ending prices of "eBay Online Auctions" such as starting time, ending time, seller feedback, postal rate etc. There is no indication in this paper that these factors have been taken into ac
There are many factors affecting the ending prices of "eBay Online Auctions" such as starting time, ending time, seller feedback, postal rate etc. There is no indication in this paper that these factors have been taken into ac
elopment. They need to be wiser in analyzing the market trends and the regulatory requirements.
Companies that provide selfless information through particip
Companies that provide selfless information through particip
count.
The paper talks about auction traffic, referring to the number of bids on an item. I think that another interesting study would be to compare the number of views of an auction with starting price to establish if there is a relationship
The paper talks about auction traffic, referring to the number of bids on an item. I think that another interesting study would be to compare the number of views of an auction with starting price to establish if there is a relationship
tion in industry events and feedback to regulatory authorities would be able to face the challenges and will be successful in developing combination products
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