Information Disclosure, Bidder Entry, and Auction Revenues: Evidence from eBay

This study investigates how information disclosure in online auctions is related to final prices and how the observed relationships relate to higher bidder valuations versus broader bidder participation. Using 31,262 U.S. eBay auctions for the Apple iPhone 6 conducted between September 2017 and August 2018—when sellers could post up to 12 photos and essentially unlimited text at zero marginal cost and transactions were covered by eBay’s Money-Back Guarantee—the analysis relates photo- and text-based disclosure to closing prices and bidder counts and assesses whether these relationships differ by Top-Rated Seller (TRS) certification. The main pattern is that photo-rich listings tend to close at higher prices, and these higher prices are correlated with bidder participation: listings with more photos also tend to have more bidders, and the photo–price relationship becomes small and insignificant once bidder counts are included. In contrast, longer descriptions show little economic payoff in this setting and are often weakly negative. Patterns by seller certification indicate that the TRS badge changes how listing detail matters. Differences between TRS and non-TRS listings are generally modest and not always statistically clear, but additional photos do not show a clear price relationship for TRS listings in the reported specifications, while the badge itself corresponds to a sizable price premium in richer specifications that use description file size. Overall, for this standardized, low-value good, richer photo disclosure is related to higher prices primarily through broader participation rather than higher bidder valuations, and certified reputation appears to dampen the incremental importance of extra listing detail. All estimates are interpreted as conditional correlations rather than causal effects.