The Classification of the Business Models of Internet Auctions for Consumer : Statistical Analyses of Internet Auctions in the USA

Abstract

Internet auctions are prevailing nowadays, but the mechanism of internet auctions has not been discussed sufficiently. This paper shows a framework of internet auctions from a strategic point of view. We classified internet auctions by mechanisms for risk reduction into 2 types; Shop Sale-type & Market Creation-type. According to the list of Yahoo! USA, there are over 250 auctions as of February 2000. We reviewed these internet auctions and attempted statistical analyses to investigate hypotheses about the classification of internet auctions. The analyses support the classification by mechanisms for risk reduction. These also support that Shop Sale-type and Market Creation-type has different mechanisms for risk reduction concerning product quality and transaction execution, which depend on characteristics of products, sellers and buyers.