The causes to relative advantage in internet auctions

The internet introduced a new platform for people to buy and sell products and services, becoming one of the most successful forms of electronic commerce. As these online transactions continue to grow, it becomes more important that sellers recognise how to understand what factors may influence the final outcome of an auction to realise maximum potential revenues. This experimental study identifies how trust, cost, and efficacy of information acquisition influence the relative advantage of online auction environments. The results show that trust and cost play the strongest roles in influencing relative advantage, implying that buyers have some hierarchy of priorities when it comes to evaluating the relative advantage of an online auction website. Theoretical and managerial implications suggest that managers focus on improving these two dimensions above everything else to achieve relative advantage.