EVALUATING ONLINE AUCTION STRATEGY: A THEORETICAL MODEL AND EMPIRICAL EXPLORATION

This paper attempts to develop a theoretical model and associated method for researching the interrelationship among, the elements embraced in the context of online auction strategy, and their influences on the online bidder satisfaction. This study utilizes the concept of standard normal distribution function to develop a theoretical model that conforms to the prospect theory. The empirical method for examining the interrelationship is large-scale filed study. The empirical study collected primary data from customers that have experience with bidding on the online auction sites. Our findings of theoretical model support that the online bidder is inclined to adopt higher-price-oriented bidding strategy at the beginning of auction. In addition, we found the optimal guideline of online auction strategy to determine the allocation of resources. The results of the empirical exploration support the intermediary roles of price and hedonic value in the relationship between quality strategy and online bidder satisfaction.