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Benefits Of Internet Auctions

Benefits of internet auctions

Table of contents
1. Introduction

2. History of auctions

3. Different types of auctions

4. Relationship between the classical model of supply & demand and auction

5. The benefiting parties due to the development of internet auctions
5.1 Advantages for entrepreneurs
5.2 Advantages for consumers

6. Suffering parties due to the development of internet auctions

7. The Downside of internet auctions

8. Conclusion

9. References
1. Introduction
In the last decade internet auctions have been increasing significantly in popularity.
According to the Department of Commerce, e-commerce has increased by 27 percent from 2001 to 2002 in the USA (Bajari, 2006). According to the Nomura Research Institute (2005), in Japan the popularity of internet auctions will increase as well. Their forecasts say it will increase from 1,080 billions of yen in 2004 to 2,080 billions of yen in 2009. On eBay, 632 million items were sold from 2001 to 2002, which is a 51 percent increase (Bajari, 2006).
The question is if the development of internet auctions is positive for the society? Or more specifically: who benefits from internet auctions? This paper will answer these questions by looking at the following issues: How did auctions develop? What is the relationship between internet auctions and the classical model of supply and demand? What are negative consequences of internet auctioning?
This paper is generally structured to answer the questions supplied above. First of all it will give some general information about the history of auctions, different types of auctions, and how internet auctions developed. Second, the paper will explain the relationship between internet auctions and the classical model of supply & demand. Finally, it will go into detail about the positive and negative effects of internet auctions.

2. History of auctions
The first time the auction was used to sell goods was in Babylon in about 500 B.C. The...