Econ 483_Lecture 6_Prizes_Contests

P rizes contests ebay ebay overview 1995 pierre

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Unformatted text preview: able to use auction-style listings make immediate sales using the "Buy it now, …xed price" make immediate sales using the eBay store listings. Lecture 6: Prizes & contests, Econ483: Econ of Innovation & Technology, Evangelia Chalioti c A ll rights reserved. P rizes Contests Ebay eBay overview 1995: Pierre Omidyar, in his home, created eBay. It was originally called EchoBay.com. Because the domain name was already registered, Echo was shortened to "e". 1998: eBay goes public 2002: eBay acquires PayPal encrypts the buyer’ sensitive …nancial information. s Auction style website: C to C (C2C): consumer to consumer B to C (B2C): eBay shops: business to customer B to B (B2B): wholesalers: business to business Lecture 6: Prizes & contests, Econ483: Econ of Innovation & Technology, Evangelia Chalioti c A ll rights reserved. P rizes Contests Ebay Web auction competitors eBay is still a market leader in the online auction market commanding a respectable 17% online market share. Lecture 6: Prizes & contests, Econ483: Econ of Innovation & Technology, Evangelia Chalioti c A ll rights reserved. P rizes Contests Ebay eBay business model Sellers pay a small fee (< $2) per listed item. eBay takes a cut ( 2.5%) of each sale. Sellers are willing to pay this fee because it is a very small price to pay compared to the global exposure they get. Although the percentage earned on any given item is small, this is pro…table for eBay precisely because the market is global. Lecture 6: Prizes & contests, Econ483: Econ of Innovation & Technology, Evangelia Chalioti c A ll rights reserved. P rizes Contests Ebay eBay business model Buyers & sellers handle exchange & payment. eBay has no inventory, no transportation, no costs at all except website operation. Conventional wisdom: Service is technically ‘ commoditizable’ but strong , ‘ network’e¤ects favor eBay. Lecture 6: Prizes & contests, Econ483: Econ of Innovation & Technology, Evangelia Chalioti c A ll rights reserved....
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