Using online auction data, we address the endogeneity involved in estimating the eff ect of the number of bidders on the winning bid. We introduce a novel instrumental variable. Our results indicate that the bias arising from treating the number of bidders as exogenous, is substantial

The paper studies an online consumer-to-consumer market with limited supply, where sellers may list their items by posted prices or auctions. I show that when there is competition among sellers, they use only posted prices in the equilibrium. This result contrasts with the findings for a...