Presidential Memorabilia on eBay: Value, Minimum Bid, and Popularity

Abstract

The paper develops a simple theoretical framework for empiricalinvestigation of the final price, number of bids, and whether an item sold for eBay auctiondata collected in 2009-2010 for presidential memorabilia items. The explanatory variablesinclude the eBay auction variables minimum bid, seller feedback, shipping and handling,and the buy-it-now feature, as well as some political variables and a measure ofpopularity. One contribution of the paper is the introduction of the popularity measureto the empirical analysis. The second contribution to the literature is a very simpletheoretical model that distinguishes between a “seller” and a “dealer” to make a predictionabout the effect of the minimum bid on the final price. The major empirical results arethat (1) the coefficient on the minimum bid in the final price regressions is between zeroand one as the theory predicts, and (2) the popularity variable has an effect on the finalprice but only via its effect on bids. (D44, L8)