If you think you would save money by bidding on eBay auctions, you would likely be right, US researchers said eBay bidders saved US$19 billion in 2007 at the popular auction site.
The independent research by two statisticians from the University of Maryland's Robert H. Smith School of Business found buyers saved US$7 billion that they might have otherwise been ready to pay in a study of eBay auction behavior in 2003.
The study seeks to calculate what economists call "consumer surplus" -- the difference between the top price buyers were ready to pay and what they actually ended up paying. E-commerce sites provide a treasure trove of data that allows researchers to test out theories of consumer behavior.
"Consumer surplus is usually very hard to measure," said study co-author Galit Shmueli. "The problem is that it is hard to ascertain how much a winner or a bidder or a user would have been willing to pay for a certain item."
The study highlights the delicate balance eBay must strike between the interests of buyers and sellers on its site.
The flip side of the same data shows that sellers leave billions on the table that they might otherwise have charged buyers by setting higher prices.
On eBay, winning bidders only pay the next increment above what the second highest bidder is willing to pay. The difference between each winning bid and what the buyer ends up paying amounts to consumer surplus.
