An Empirical Study of Online Penny Auctions

We investigate why QuiBids has survived a string of bankruptcies and closings of penny auction sites over the past two years. We nd that although inherently protable on an auction by auction basis, penny auction sites have problems retaining users. In order to alleviate this problem, many sites implemented a Buy-Now system, where bidders could contribute money already lost in an auction towards the purchase of the auctioned item at a slightly inated price. First we use empirical data to look at why