Optimal Capital Preservation Methods for Small/Micro-Sized Businesses in Online Auction Settings : A Quantitative Study of Australian Online Diamond Auctions

Sammanfattning

The COVID-19 pandemic led to a surge in small and micro-sized e-commerce startups leveraging platforms like eBay and Amazon to reach larger audiences. These startups faced challenges in capital preservation and price discovery. Online auctions have become an emerging tool for gauging consumer willingness to pay, while also preventing capital losses by utilizing reserve prices. This thesis examines the impact different reserve pricing methods have on average sale prices and clearance rates. A quantitative study of online diamond auctions in Australia covering a four year period was conducted using non-parametric tests and ordinal logistic regressions. The findings indicate that the use of reserve prices leads to higher average sale prices than unreserved auctions, with hidden reserve pricing achieving higher sale prices than starting reserves. Hidden reserves also had the lowest clearance rate, with starting reserves having only a marginally lower clearance rate than unreserved auctions. Additionally, it was found that sales on weekends and Wednesdays yielded higher average prices than other weekdays.