The dynamics of mass online marketplaces: a case study of an online auction

The Internet has dramatically changed how people sell and buy goods. In recent years we have seen the emergence of electronic marketplaces that leverage information technology to create more efficient markets such as online auctions to bring together buyers and sellers with greater effectiveness at a massive scale. Despite the growing interest and importance of such marketplaces, our understanding of how the design of the marketplace affects buyer and seller behavior at the individual level and the market effectiveness at the aggregate level is still quite limited. This paper presents a detailed case study of a currently operational massive scale online auction marketplace. The main focus is to gain initial insights into the effects of the design of the marketplace. The results of the study point to several important considerations and implications not only for the design of online marketplaces but also for the design of large-scale websites where effective locating of information is key to user success.

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