Date of this Version
Do firms neglect competition when making entry decisions? This paper addresses this question analyzing the time of day at which eBay sellers set their auctions to end. Consistent with competition neglect, it is found that (i) a disproportionate share of auctions end during peak bidding hours, (ii) such hours exhibit lower selling rates and prices, and (iii) peak listing is more prevalent among sellers likely to have chosen ending time strategically, suggesting disproportionate entry is a mistake driven by bounded rationality rather than mindlessness. The results highlight the importance for marketing researchers of assessing rather than assuming the rationality of firm behavior.
Originally published in Management Science © 2010 INFORMS
This is a pre-publication version. The final version is available at http://dx.doi.org/10.1287/mnsc.1100.1180
market entry, marketing, competitive strategy, behavioral economics
Simonsohn, U. (2010). eBay's Crowded Evenings: Competition Neglect in Market Entry Decisions. Management Science, 56 (7), 1060-1073. http://dx.doi.org/10.1287/mnsc.1100.1180
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Date Posted: 15 June 2018
This document has been peer reviewed.