Journal of Business Research 64 (2011) 10601066

Contents lists available at ScienceDirect

Journal of Business Research

Emic and etic interpretations of engagement with a consumer-to-consumer online

auction site
Eathar Abdul-Ghani , Kenneth F. Hyde, Roger Marshall
Auckland University of Technology, New Zealand

a r t i c l e

i n f o

Article history:
Received 1 March 2010
Received in revised form 1 September 2010
Accepted 1 October 2010
Available online 16 November 2010
Keywords:
Online auctions
Engagement
Social exchange
Community
Business relationships

a b s t r a c t
This paper provides emic and etic interpretations of engagement with a consumer-to-consumer (C2C) online
auction site, based on in-depth interviews with buyers. The study exposes three misconceptions about online
C2C auctions; that the interaction between parties occurs exclusively online, that the relation between buyers
and sellers is purely transactional in nature, and that the interaction between buyers and sellers does not lead
to ongoing business relationships. The paper reveals the utilitarian, hedonic and social benets that are the
bases of engagement with the auction site. Social benets materialize for auction buyers during ofine
exchanges. The paper also reveals marketer incentives and structural disincentives for consumers' ongoing
use of the auction site.
2010 Elsevier Inc. All rights reserved.

1. Introduction
Online consumer-to-consumer (C2C) auctions are marketplaces
from which millions of consumers worldwide acquire goods. These
auction sites provide an alternative source of goods to bricks-andmortar and online retail stores. The world's largest online C2C auction,
eBay, is ve times the size of the largest online retailer, Amazon.com
(Chong, 2004). At rst blush online C2C auctions may appear to be
pure marketplaces where transactions between buyers and sellers,
who are strangers, focus on establishing the price and true value of
goods (Wilcox, 2000). Online C2C auctions may appear not to lead to
ongoing business relationships between buyers and sellers, as the two
parties are anonymous, their exchanges are discrete, and the parties
are unlikely to transact with each other again in the future (Rauniar
et al., 2009; Zhou et al., 2009).
Engagement refers to a consumer's ongoing attention to an object
of consumption such as a website or brand. Engagement is a state of
being involved, occupied, fully absorbed, or engrossed in something
sustained attention (Higgins and Scholer, 2009, p. 102). Online
auction sites are highly engaging for many of the consumers who visit
them. The popular press regularly reports stories of consumers who
devote excessive attention to online auctions (Herschlag and Zwick,
2002). The stories reveal aspects of compulsive consumption, with
consumers losing track of the amount of time and money they are
spending on auction sites (Cameron and Galloway, 2005; Peters and

Corresponding author. Faculty of Business and Law, Auckland University of Technology,

42 Wakeeld Street, Auckland, New Zealand. Tel.: +64 9 9219619; fax: +64 9 9219990.
E-mail address: eathar.abdul-ghani@aut.ac.nz (E. Abdul-Ghani).
0148-2963/$ see front matter 2010 Elsevier Inc. All rights reserved.
doi:10.1016/j.jbusres.2010.10.009

Bodkin, 2007). The study here seeks to clarify the bases of consumer
engagement with online C2C auction sites.
Online C2C auctions demonstrate an amalgam of the characteristics of a C2C marketplace, a traditional auction house, and an online
retail store. A literature review on consumer behavior reveals some of
the likely bases for consumer engagement with online auction sites.
Online auctions likely deliver specic utilitarian, hedonic, and
social benets to consumers. The paper proceeds with an explanation
of the operation of C2C online auctions. Section 2 explores the
theoretical foundations for the study, engagement, social exchange,
C2C markets, utilitarian and hedonic benets to consumers. Section 3
presents the methods of the study. Section 4 presents emic and etic
interpretations of engagement with an online C2C auction site, based
on in-depth interviews with a broad sample of buyers. Section 5
draws managerial implications from these ndings.

2. Theoretical foundations
2.1. Online C2C auctions
An online auction site acts as a consumer-to-consumer (C2C)
marketplace, bringing together buyers and sellers who are typically
ordinary citizens and end-consumers (Turban and King, 2003). Until
recently, only retail stores offered the wide selection of goods a
consumer sought. However, the advent of online auctions transforms
this business model. As C2C online auctions grow in size, more and
more consumers view online auctions as a source for the goods they
require. Online auction sites extend the life of goods, maintain goods
in circulation for longer periods, and have the potential to reduce

E. Abdul-Ghani et al. / Journal of Business Research 64 (2011) 10601066

consumer demand for goods from retail stores (Cameron and

Galloway, 2005; Chu and Liao, 2007, 2010; Nissanoff, 2006).
Online auctions differ from traditional auctions, traditional
retailing, and online retailing. Traditional bricks-and-mortar auctions
are noisy, social places where verbal and non-verbal communication
occurs, and the identity of bidders is usually obvious. In online
auctions, much of this live information is missing. Online auctions
occur in asynchronous time; buyers and sellers are not present in the
same space at the same time (Chakravarti et al., 2002; Cui et al., 2008).
A lack of face-to-face contact exists between buyers and sellers, and
buyers and sellers are not able to identify one another (Rafaeli and
Noy, 2002; Yen and Lu, 2008). Consumer behavior in online auctions
also differs from consumer behavior in bricks-and-mortar retail stores
(Rafaeli and Noy, 2002; Simonson, 2002). In a retail store the item's
price, tactile product aspects (e.g., packaging), store environment, and
salesperson actions inuence purchase decisions (Solomon, 2008).
Apart from the item's price, none of these other factors likely forms a
substantial part of the purchasing experience in an online auction. In
an online auction, the consumer focuses primarily on the price
ascending during the bidding process, and the actions of competing
bidders (Ariely and Simonson, 2003). Compared to shopping from on
online retailer, shopping from an online auction site is a more
dynamic and animated process, with competitive action occurring in
real time, and the consumer involved in more complex decisionmaking (Rauniar et al., 2009). Consumers face greater risk, uncertainty and complexity purchasing from an online auction rather than
an online retailer (Finch, 2007).
Auctions sometimes are considered pure markets because any
item's value is determined by the marketplace (Wilcox, 2000). In a
pure market, all activity occurs as discrete transactions, and virtually
all information required appears in the price of the product (Webster,
1993). A transaction in a pure market is a once-off exchange between
parties with no subsequent interaction. Compared to B2C transactions
and other forms of C2C trading, the online auction does not appear to
involve the building of ongoing buyerseller relationships (Rauniar
et al., 2009; Zhou et al., 2009).
Consumer behavior research about online auctions focuses
primarily on the determinants of winning prices and the dynamics
of the bidding process. Winning prices are affected by the number of
bidders in an auction, the times of entry and exit to the auction, the
value of the opening bid, and the number of bids (Rafaeli and Noy,
2002; Reynolds et al., 2009). Consumer bidding behavior depends on
a variety of personal factors, environmental factors, and social factors
(Rafaeli and Noy, 2002). While researchers have examined the
dynamics of bidding, little research addresses the bases for consumer
engagement with this marketplace.

2.2. Engagement
Engagement is employed widely in advertising and marketing to
describe a consumer's sustained attention to a market offering, yet has
only recently received the attention of academics (Calder et al., 2009;
Mollen and Wilson, 2010). Engagement shares some commonality
with other concepts describing consumer attention or interest,
including involvement, ow and interactivity (Calder et al., 2009;
Mollen and Wilson, 2010).
More generally, involvement describes consumer interest in a
product category, whereas engagement describes consumer commitment to an active relationship with a specic market offering.
Engagement with an object of consumption requires paying attention
to and developing feelings for that object (Scott and Craig-Lees, 2010).
Engagement applies to a consumer's connection with media (Calder
et al., 2009), advertising (Higgins and Scholer, 2009), entertainment
(Scott and Craig-Lees, 2010) or brands (Bowden, 2009; Sprott et al.,
2009).

1061

Research work applies the concept to a consumer's ongoing

relationship with a website (Calder et al., 2009; Mollen and Wilson,
2010). The bases of consumer website engagement likely include both
utilitarian and hedonic benets (Calder et al., 2009). Where the
website involves the interaction of consumers with one another,
engagement also likely includes social bonding and exchange of social
benets (Chan and Li, 2010).
Online C2C auction sites are highly engaging for many consumers.
For many consumers, logging in to a favorite online C2C auction site is
part of their daily routine (Cameron and Galloway, 2005; Peters and
Bodkin, 2007). Online auction sites can cause consumers to lose track
of the amount of time and money they spend on auction sites
(Herschlag and Zwick, 2002). Eriksen (2008) reports that online
auction sites are amongst the most common websites visited by
employees using their work computer during working hours. Some
consumers even exhibit dependence on auction sites; they may be
reluctant to be separated from their auctions, even when at work or
on holiday (Peters and Bodkin, 2007). This research addresses the
bases for consumer engagement with online C2C auctions.
2.3. Social exchange
Social exchange theory helps explain business-to-business (B2B)
relationships (Kingshott, 2006; Lambe et al., 2001). B2B relationships,
and indeed suppliercustomer relationships in many elds, rely not
merely on discrete economic exchanges but also on long-term,
informal, social exchanges (Coviello et al., 2002; McKee and Wang,
2006; Webster, 1993). Social exchange theory provides a theoretical
foundation for explaining C2C exchanges. C2C exchanges involve both
economic and social resource exchanges between parties.
According to social exchange theory, rewards are both tangible
and intangible (Homans, 1956, 1974). Two parties engage in a
synergistic activity rewarding and reinforcing each other (Li, 2008).
Those rewards are often emotional in nature; social approval from
others and pride in oneself can offer strong reinforcement (Lawler,
2001). Social exchange is distinct from economic exchange (BeckettCamarata et al., 1998; Blau, 1964). Economic exchange involves discrete
transactions, with resources exchanged being tangible in nature. In
social exchange, the resource exchanges involve goods and money as
well as information, pleasures of human contact, and social approval
(Chan and Li, 2010). Purely economic exchange likely occurs between
strangers, while social exchanges more likely occur during ongoing
relationships where social distances are small (Sahlins, 1965).
Reciprocity and trust are characteristics of social exchange (Blau,
1964). When one party gives the other a resource, they expect
reciprocation sometime in the future (Cook, 2005; Richard et al.,
2009). Parties to a social exchange learn to trust one another, and give
resources without expecting immediate reward. In modern society,
where social relations are more often the interaction of strangers and
less often the interaction of local communities, trust relations and
reciprocity are critical (Cook, 2005). Trust relations are paramount
under conditions of risk and uncertainty, particularly in electronic
markets. Online reputation-rating systems help establish trust
between strangers (Luo, 2002).
2.4. C2C marketplaces
Consumer-to-consumer trading of goods has a long history. For
centuries, consumers have exchanged goods in village and town
marketplaces (Belk et al., 1988). Modern C2C marketplace examples
include ea markets, swap meets, garage sales, auction houses, and
classied newspaper advertisements (Belk et al., 1988; Sherry, 1990;
Lastovicka and Fernandez, 2005; Nissanoff, 2006). C2C marketplaces
are highly sociable environments (Sherry, 1990). They are places of
social interaction, which foster a sense of community and we-ness

1062

E. Abdul-Ghani et al. / Journal of Business Research 64 (2011) 10601066

amongst the parties involved (Belk et al., 1988; Herrmann, 2006;

Lastovicka and Fernandez, 2005).
Just as ea markets represent communities, C2C online auctions
may represent virtual communities. Rheingold (2005) coined the
term virtual community to describe, social aggregations that emerge
from the net when enough people carry on public discussions long
enough, with sufcient human feeling, to form webs of personal
relationships in cyberspace (p. 521). The purpose of a virtual
community can range from enjoyment and the playing out of
fantasies, to information sharing and knowledge building, to building
relationships and conducting transactions (Armstrong and Hagel,
1996). The benets derived from participation in an online community include both access to utilitarian resources and social benets
such as the pleasures of human contact and social approval (Chan and
Li, 2010).
Virtual communities appear important to the success of some
auction websites, including China's Taobao site. China's electronic
marketplace lacks comprehensive law enforcement; Taobao's success
is part due to the priority placed on building virtual communities and
trust amongst members (Chen et al., 2007). Thus, online community
and mutual trust might prove important to consumer engagement
with online auctions.
2.5. Utilitarian and hedonic benets
The utilitarian and hedonic benets afforded shoppers at online
retail websites are well recognized (Childers et al., 2001; Wolnbarger and Gilly, 2001). Utilitarian benets are those associated with the
pragmatic issues of obtaining goods, while hedonic benets are those
associated with the pleasures obtained from the shopping experience
(Babin et al., 1994; Holbrook and Hirschman, 1982). Online shopping
provides a consumer with the convenience of shopping from home
24 h a day, a wide selection of goods, ease of use, availability of
information, and potential cost savings (Wolnbarger and Gilly,
2001). Hedonic online shopping benets include sensory stimulation,
novelty, playfulness, and the joys of exploration (Rohm and
Swaminathan, 2004; To et al., 2007; Wolnbarger and Gilly, 2001).
Yet differences exist between online retail and online C2C auction
websites. With online retail sites, consumers have access to goods at a
xed price, for extended periods. Sensory stimulation is somewhat
limited to lists, photographs and demonstrations of products. By
comparison, consumers at online auction sites have access to a
broader range of goods for a limited period; however, these goods
often sell at the highest bid price, rather than a xed price. The online
auction provides sensory stimulation from competing with other
buyers to win the goods auctioned. Online C2C auction sites likely
deliver specic utilitarian, hedonic, and social benets to consumers.
This study seeks to clarify the bases of consumer engagement with
online C2C auction sites.
3. Methods
The research utilizes in-depth interviews with auction users to
present emic and etic interpretations of engagement with the auction
site. An emic interpretation refers to the research participant's
representation of their experiences, thinking and external inuences;
an etic interpretation is the researcher's explanation of the phenomenon based on multiple emic sources (Woodside, 2010). The study
examines users of the Trade Me auction site in New Zealand (www.
trademe.co.nz). Trade Me has a near-monopolistic position in the
online C2C auction market in New Zealand; in a nation of just four
million people, Trade Me has more than two million registered users.
The website's popularity is such that Trade Me accounts for more than
50% of all trafc originating from New Zealand-based Internet servers
(MacManus, 2006; WebsiteTrafcSpy, 2010).

3.1. Data collection

The researchers interviewed at length twenty-two regular users of
the Trade Me site. Interviews followed an interview guide questioning
consumer usage of the auction site, reasons for visiting the site, items
bought and sold. Questions probed daily experiences with the
website, perceived utility and benets from website usage, emotional
experiences, self-image and website usage, bidding experiences,
purchase of gifts and items for collections, participation in the virtual
community and perceived risks in website use. Interviews lasted up to
65 min, were audio recorded and transcribed by an independent
transcriber (Taylor and Bogdan, 1998).
Purposive sampling procedures sought variation in those variables
likely to impact on consumer engagement with the auction: gender,
age, and usage experience (Black, 2005a,b, 2007). All interviewees are
regular users of the auction site for at least one year, in one instance
for more than ten years. Interviewees show variation in frequency of
use of the site, and intensity of emotions experienced interacting with
the site. Table 1 provides a prole of the sample of research
participants. The design includes using property space analysis
(Lazarsfeld, 1993; Woodside, 2010) in the selection of participants;
an attempt was made to include at least one person in each possible
combination of age (three categories), by gender and by years of
auction experience (two categories) (i.e. 12 combinations of cells in
total). Property space analysis considers theoretically possible congurations and emphasizes the value of looking for seemingly
unusual, rare or outlier cases (Woodside, 2010).
3.2. Data analysis
NVivo 8 qualitative data analysis software assisted in coding data
(QSR-International, 2008). Coding proceeded in a bottom-up
manner, with codes emerging from the data rather than imposed
upon the dataset (Braun and Clarke, 2006; Glaser and Strauss, 1967).
In total, the research identies more than 60 unique codes in the
dataset. A second, independent, coder checked reliability of the coding
of a sample transcript. The Perreault and Leigh (1989) score of
I = 0.928 indicates a high degree of reliability in coding. Thematic
analysis procedures identied over-riding themes in the dataset,
without use of computer software (Attride-Stirling, 2001; Braun and
Clarke, 2006; Owen, 1984; Welsh, 2002).
4. Findings
The bases of consumer engagement with the auction site are
utilitarian, hedonic and social benets. Marketer incentives and
disincentives also impact engagement (see Table 2).
4.1. Evidence of engagement
Evidence indicates consumer engagement with the auction site.
Interviewees spend excessive time and money on the site; some admit
to compulsive usage (Lee et al., 2008; Peters and Bodkin, 2007).

Table 1
Property space analysis for selection of research participants.
Gender

Male

Female

Age

b 30 years
3049 years
50+ years
b 30 years
3049 years
50+ years

Usage
b5 years

5+ years

+
+

+
+

+
+
+
+
+

E. Abdul-Ghani et al. / Journal of Business Research 64 (2011) 10601066

Table 2
Bases of engagement with the online auction site.
Utilitarian benets
Utility of the marketplace
Convenience
Ease of use
Anonymity
Wide selection of goods
Access to rare items
Low prices
Knowledge of the market
On-selling
Utility of goods
Second-hand
Collectible
Hedonic benets
Pleasure in the marketplace
Bidding
Browsing
Hunting
Pleasure in goods
Owing
Social benets
Ofine community
Business relationships
Trust
Social approval
Peer group membership
Self image
Competence and pride
Marketer incentives
Accumulate rating points
Marketing communications
Disincentives
Buyer's remorse
Delayed gratication
Non-tactile medium

1063

I like to keep to myself and on Trade Me nobody really knows

what you're doing, what you're bidding on, how much you're
paying. (Male, 3539 years).
The auction site offers consumers a wide selection of goods, including
rare and unusual items. Furthermore, consumers perceive prices low.
It's a big collection of everything you can look at probably a lot
more than you would ever nd even in a whole shopping mall.
(Female, 2024 years).
You don't have to rush to the shops as well, even if there's a sale.
Because you know, hey, so what there's a sale! I can always go
back to Trade Me. It's [the desired item] always going to be there, I
can get it a bit cheaper. (Male, 2024 years).
Consumers perceive the auction site a valuable source of
information on goods available in the marketplace and the value of
goods. The site acts as a safety net, as buyers can on-sell goods they
have purchased but are unsatised with, or no longer need (Chu and
Liao, 2007, 2010; Denegri-Knott and Molesworth, 2009). Buyers are
satised purchasing second-hand goods, knowing they are able to
own more possessions, including luxury brands (Nissanoff, 2006).
If I didn't buy second-hand my house wouldn't be as well
furnished as it is. My child wouldn't be as well dressed, or have as
many toys to play with . Why waste money on something new
if you can buy one that's just as good second-hand. (Female, 35
39 years).
Buyers utilize the auction as a source of items for collections (Belk,
1995; Formanek, 1994).

It probably made me start collecting more because it was so easy

There was a lot of stuff there that I wouldn't normally come across .
Because it was there on your computer screen, it probably made me
more readily part with my money. (Male, 5559 years).

You'd be on until late at night and you would totally lose track
of time. You'd be so engrossed. (Female, 3539 years).

Sometimes I feel like it dominates my day Sometimes I think

I've got to stop this, it's like an addiction Some days I race in the
door and I'm on there. Any emails? Anything on Trade Me? Bids?
Anyone outbid me? (Female, 3034 years).

4.2. Utilitarian benets

Two forms of utility drive consumer engagement with the auction
site: utility of the marketplace and utility of goods. Buyers prefer the
auction site as a marketplace; buyers who dislike the stresses of
commuting and crowding at shopping malls, or have responsibility for
care of children, perceive the auction site convenient.
If you go to the shops you think, well I better gure out what I'm
going to wear, and I've got to do my hair and you know, look
decent, and dress the kids. And then, by the time I've done all that,
well it's hardly worth going. (Female, 3034 years).
Buyers perceive the auction site a convenient way of sourcing
goods, and easy to use. They value the anonymity of buying from the
auction.

4.3. Hedonic benets

Two forms of pleasure drive consumer engagement with the
auction site: pleasure in the marketplace and pleasure in goods.
Buyers nd pleasure in the marketplace through bidding, browsing,
hunting and owning. Consumers engage with the auction site for the
thrill of bidding and watching others bid (Ariely and Simonson, 2003;
Haubl and Popkowski-Leszczyc, 2004).
There's a few cases where there was one other person bidding
against me, and we were one-on-one. In that sort of case, you sort of
don't care about price in a way. You just want to win the auction
Usually your heart keeps rushing up and down, saying, come on!
Am I going to win? Am I going to win? (Male, 2024 years).
Browsing the auction site is a daily routine for buyers, who
compare the enjoyment of browsing to the enjoyment of windowshopping (Arnold and Reynolds, 2003).
I found sometimes I have done searches where you just are
looking you just want to see what's there. And suddenly I go,
oh, look at all this stuff, I never even thought about this I could
buy this! (Female, 3034 years).
When browsing the site buyers stumble upon desirable items,
with no prior intention of buying. Such items are available for limited

1064

E. Abdul-Ghani et al. / Journal of Business Research 64 (2011) 10601066

time, and can be snapped up by other bidders. Consequently, buyers

act spontaneously. Attractive photographs and descriptions of items
on sale further encourage buying impulsively (Gregg and Walczak,
2008; Stern and Stafford, 2006).
You sometimes come across things and think, well that's quite
nice. And you check out the rest of the listings and think, oh that's
nice too, and that's nice! And let's have a go. We could win it easy.
You know, they're not always sort of essential items. Obviously
they're all luxuries. (Female, 3034 years).
Buyers experience pleasure from hunting and snaring a bargain.
Buyers gain pleasure from ownership of goods. Pleasures include the
joys experienced unwrapping a parcel delivered in the mail.
It's great to receive a package in the mail Like if someone sends
you a package without you knowing it, and it's really exciting. And in
some ways, maybe Trade Me does that too. (Female, 3539 years).
4.4. Social benets
Consumers gain social benets from engagement with the auction
site. There is evidence of an ofine community of auction users, similar
to the communities established adjoining other C2C trading activities
(Herrmann, 2006; Sherry, 1990). After winning an auction, buyers
email sellers, or visit their homes to receive goods. Such social
exchanges are highly pleasurable; buyers strike up friendships with
sellers (Homans, 1974; Lawler, 2001). This contrasts to the impersonal experience of online shopping, which lacks human contact.
Once you buy something, you have some communication with the
seller. And you generally, go and meet the seller if you're picking
up an item. And yes, it's often quite a pleasant social experience.
(Female, 3539 years).

I think it only becomes real when you have completed a sale and
then you start entering into negotiations about how to pay, where
you live, posting, collecting, what time suits. And then it often
goes from the computer to phone ... So then it becomes much
more engaging and personal. At the sort of virtual phase there's
not a lot of human contact there, no face-to-face, no voice. As soon
as it steps out of that then it becomes much more engaging.
(Female, 3539 years).
Enduring business relationships form between buyers and sellers
following an initial trade. Aspects of social exchange with sellers can be
rewarding for buyers. Buyers may nd sellers helpful and professional to
deal with. The goods sold are of good quality, closely match buyer needs,
or are difcult to obtain elsewhere. These experiences encourage buyers
to maintain contact with a seller. Sellers encourage ongoing relationships by exchanging contact details with buyers, and offering buyers
access to rare merchandise. Many business relationships initiated
online, persist ofine.

People have reached the status quo where, I'm not going to rip you
off, you don't rip me off. And it seems to work. (Male, 3539 years).
Consumers endorse the system of buying and selling from other
consumers, and believe that society should demonstrate such trust
(Cook, 2005). Consumers perceive that buying from other consumers
provides income to householders like themselves.
I really think the rating tool keeps people honest. I sort of think
that it's how society should be built on trust and ethics and the
right thing to do The other thing is I like supporting individuals
rather than big franchises and corporates cottage industry
women with a new business, I like supporting that. (Female, 35
39 years).
Consumers derive further social benets from participation in the
auction. Consumers receive praise from friends on the style, quality or
brand of goods purchased, and praise for bargain prices (Homans,
1974; Lawler, 2001). Talking about auction experiences provides
socially-satisfying conversation with friends, and endows membership of a peer-group of auction users. Being an auction user can
contribute to a consumer's self-image (Higie and Feick, 1989).
Continued use of the auction site builds consumer competence and
pride in their ability to buy cleverly and skillfully (Lawler, 2001; Ryan
and Deci, 2000).
I am the Trade Me Queen. Everyone knows me I suppose that's
part of who I am. (Female, 3539 years).

4.5. Marketer incentives

Marketer activities encourage consumer engagement with the
auction site. The intended purpose of a trader rating system is to
protect buyers and sellers (Brown and Morgan, 2006; Zhou et al.,
2009) yet this system has an unexpected consequence: buyers are
motivated to purchase from the auction site to accumulate rating
points and enhance their online reputations.
There's that good old feedback rating that motivates you because
you're trying to up and up and up that all the time You can buy
it [the desired item] off a website, or you can buy it off Trade Me.
I'll always go off Trade Me and get my good feedback [points].
(Female, 3034 years).
Other activities encourage consumer engagement. The auction
company sends email or SMS messages when buyers are outbid in an
auction, or an auction is about to close.

4.6. Disincentives
Disincentives reduce consumer engagement with the auction site.
Buyers experience remorse if they overspend to win an item at
auction (Bajari and Hortacsu, 2003).

When I bought my wristwatch, there was this guy based in North

Shore I bought it from. The next time I actually saw the products
he had listed, and I sent him an email directly Rather than
going through Trade Me, can I buy it from you straight away? And
he said yes. (Male, 3539 years).

It denitely has a drawback, because then you start bidding more

than what you should have ... The competitiveness against the
person takes over and you go, great, I've won! But my goodness,
I've paid double what I really should have. (Male, 3539 years).

Buyers consider Trade Me a safe place to purchase goods, as the

auction site is New Zealand-based. Buyers perceive New Zealand a
small community, where sellers can be located readily if a deal goes
wrong. Buyers view Trade Me as a self-regulating community built on
mutual trust.

Purchase from an auction site entails delayed gratication; where

retail store buyers receive goods immediately, online auctions buyers
wait to possess goods. An auction site does not provide tactile
experience of goods, such as the texture of a garment, as occurs
purchasing from a retail store (Wolnbarger and Gilly, 2001).

E. Abdul-Ghani et al. / Journal of Business Research 64 (2011) 10601066

5. Conclusion
Online consumer-to-consumer auctions are barely fteen years
old, yet millions of consumers worldwide source goods from these
marketplaces. This research has sought to clarify the bases of
consumer engagement with one online auction site. Those bases are
the utilitarian, hedonic and social benets afforded consumers. The
research also identies marketer incentives and structural disincentives for buyer engagement with the auction site.
Online C2C auctions may appear pure markets involving transactions between strangers, without ongoing business relationships
(Wilcox, 2000; Zhou et al., 2009). The study here nds otherwise. The
study shows that initial contact between buyers and sellers on the
auction site leads to long-term exchange relations in the ofine
environment. Such relations are not purely transactional exchanges
but social exchanges.
The utilitarian benets afforded consumers at online auction sites
are similar to the benets afforded consumers at online retail sites:
convenience, ease of use, selection of goods, low prices, and
information on the market. Online retail sites have yet to penetrate
the consumer market in New Zealand; the largest online retailer
ceased operations in 2009, failing to deliver expected sales volumes
(Bennett, 2009). One reason for this lack of success is the ability of the
Trade Me auction site to deliver the goods consumers desire, at low
prices. Online retail sites and online auction sites share a number of
hedonic benets for consumers: browsing, hunting and owning. The
unique hedonic benet afforded consumers at auction sites is the
thrill of competing to win (Cameron and Galloway, 2005).
Research on consumer behavior in auction sites emphasizes
bidding behaviors, and neglects behaviors that occur after auctions
close (Cui et al., 2008). This paper is the rst to reveal the social facets
of consumer behavior associated with online auctions. Engagement
with the auction site provides consumers with social benets
including satisfying social exchanges ofine, membership of a
community, acceptance by a group of peers, praise and admiration
from friends, and satisfaction from sharing stories of auction
experiences. A large ofine community of auction users exists who
share common interests, norms, values and practices (Schau et al.,
2009).
Social exchanges between buyers and sellers outside the auction
site are similar to social exchanges that occur at other C2C marketplaces (Belk et al., 1988; Sherry, 1990). Exchanges include the
pleasures of social bonding with strangers in an atmosphere of trust
(Cook, 2005). Social reinforcement is absent from consumer engagement with online retail sites, yet online auctions are highly social.
Interactions at online retail sites are humancomputer interactions,
while interactions at online auction sites are humanhuman interactions with website mediation.
The ndings of the study have implications for business practice.
Online auction companies can encourage ofine communities of
users. One means is convening regular conferences of auction users, as
the eBay company does, as fora to share practices, provide support and
encouragement for community members (Muniz and O'Guinn, 2001).
Trust is crucial to the longevity of any auction user community. Online
auction companies need safeguard the trust amongst auction users, by
exposing fraudulent practices where they arise, and seeking public,
punitive action against fraudulent traders. Sellers on auction sites can
encourage business relations with buyers through prompt, efcient
delivery of product, and generous returns policy (Chia-Hui and HsiPeng, 2008; Finch and Huang, 2009). Ofine business relationships
develop where sellers are honest, obliging, and friendly in interaction
with buyers.
Future research should investigate the norms, values and practices
of auction communities. The means by which community practices
create value for members needs to be understood (Schau et al., 2009).
Research can develop a scale to measure consumer engagement with

1065

auction sites, and relate levels of engagement to consequent

behaviors, including the time and money consumers spend on auction
sites.
Online C2C auction sites are marketplaces that exemplify characteristics of bricks-and-mortar auction houses, online retail websites
and traditional C2C marketplaces. Consumer engagement in C2C
auctions is more than the battle of anonymous bidders contesting
prices. This study reveals the social benets and community behaviors
of consumers engaged in an online C2C auction site.
Acknowledgments
The authors appreciate comments and suggestions by Hugh
Pattinson, University of Western Sydney, and Arch G. Woodside,
Boston College, on an earlier draft of this article.
References
Ariely D, Simonson I. Buying, bidding, playing, or competing? Value assessment and
decision dynamics in online auctions. J Consum Psychol 2003;13(1/2):11323.
Armstrong A, Hagel J. The real value of on-line communities. Harv Bus Rev 1996;74(3):
13441.
Arnold MJ, Reynolds KE. Hedonic shopping motivations. J Retailing 2003;79(2):7795.
Attride-Stirling J. Thematic networks: an analytic tool for qualitative research. Qual Res
2001;1(3):385405.
Babin BJ, Darden WR, Grifn M. Work and/or fun: measuring hedonic and utilitarian
shopping value. J Consum Res 1994;20(4):64456.
Bajari P, Hortacsu A. The winner's curse, reserve prices and endogenous entry:
empirical insights from eBay auctions. Rand J Econ 2003;34(2):32955.
Beckett-Camarata EJ, Camarata MR, Barker RT. Integrating internal and external
customer relationships through relationship management: a strategic response to a
changing global environment. J Bus Res 1998;41(1):7181.
Belk RW. Collecting in a consumer society. London: Routledge; 1995.
Belk RW, Sherry JF, Wallendorf M. A naturalistic inquiry into buyer and seller behavior
at a swap meet. J Consum Res 1988;14:44970.
Bennett A. Ferrit's failure tipped by industry: Telecom blames economy but analysts say
it was a bad idea. NZ Her 2009:B01 13 January.
Black GS. Is eBay for everyone? An assessment of consumer demographics. SAM Adv
Manage J 2005a;70(1):509.
Black GS. Socio-economic determinants of participation in on-line auctions. Atlantic
Econ J 2005b;33(4):4878.
Black GS. Consumer demographics and geographics: determinants of retail success for
online auctions. J Target Meas Anal Mark 2007;15(2):93-102.
Blau PM. Exchange and social life. New York: Wiley; 1964.
Bowden JL. The process of customer engagement: a conceptual framework. J Mark
Theory Pract 2009;17(1):6374.
Braun V, Clarke V. Using thematic analysis in psychology. Qual Res Psychol 2006;3(1):
77-101.
Brown J, Morgan J. Reputation in online auctions: the market for trust. Calif Manage Rev
2006;49(1):6181.
Calder BJ, Malthouse EC, Schaedel U. An experimental study of the relationship between
online engagement and advertising effectiveness. J Interact Mark 2009;34(4):
32131.
Cameron DD, Galloway A. Consumer motivations and concerns in online auctions: an
exploratory study. Int J Consum Stud 2005;29(3):18192.
Chakravarti D, Greenleaf E, Sinha A, Cheema A, Cox JC, Friedman D, et al. Auctions:
research opportunities in marketing. Mark Lett 2002;13(3):28196.
Chan KW, Li SY. Understanding consumer-to-consumer interactions in virtual
communities: the salience of reciprocity. J Bus Res 2010;63(910):103340.
Chen J, Zhang C, Yuan Y, Huang L. Understanding the emerging C2C electronic market in
China: an experience-seeking social marketplace. Electron Mark 2007;17(2):
86-100.
Chia-Hui Y, Hsi-Peng L. Effects of e-service quality on loyalty intention: an empirical
study in online auction. Manag Serv Qual 2008;18(2):12746.
Childers TL, Carr CL, Peck J, Carson S. Hedonic and utilitarian motivations for online
retail shopping behavior. J Retailing 2001;77(4):51135.
Chong B. How buyer experience in online auctions affects the dimensionality of trust in
sellers: an unexpected nding. Proceedings the 25th International Conference on
Information Systems; 2004. p. 697710.
Chu H, Liao S. Exploring consumer resale behavior in C2C online auctions: taxonomy
and inuences on consumer decisions. Acad Manage Sci Rev 2007;11(3):1-25.
Chu H, Liao S. Buying while expecting to sell: the economic psychology of online resale.
J Bus Res 2010;63(910):10738.
Cook KS. Network, norms, and trust: the social psychology of social capital. Soc Psychol
Q 2005;68(1):4-14.
Coviello NE, Brodie RJ, Danaher PJ, Johnston WJ. How rms relate to their markets: an
empirical examination of contemporary marketing practices. J Mark 2002;66(3):
3346.
Cui X, Lai VS, Liu CKW. Research on consumer behaviour in online auctions: insights
from a critical literature review. Electron Mark 2008;18(4):34561.

1066

E. Abdul-Ghani et al. / Journal of Business Research 64 (2011) 10601066

Denegri-Knott J, Molesworth M. I'll sell this and I'll buy them that: eBay and the
management of possessions as stock. J Consum Behav 2009;8:30515.
Eriksen AM. Quarter of workers' time online is personal. New Zealand: Herald; 2008.
Retrieved 9/26/08 from http://www.nzherald.co.nz/nz/news/article.cfm?
c_id=1&objectid=10534055.
Finch BJ. Customer expectations in online auction environments: an exploratory study
of customer feedback and risk. J Oper Manage 2007;25:98597.
Finch BJ, Huang X. Predictability of impending online auction business failure: A p-chart
analysis. Qual Manag J 2009;16(2):2533.
Formanek R. Why they collect: collectors reveal their motivations. In: Pearce SM, editor.
Interpreting objects and collections. London: Routledge; 1994. p. 32735.
Glaser BG, Strauss AL. The discovery of grounded theory: strategies for qualitative
research. New Brunswick, NJ: Aldine Transaction; 1967.
Gregg DG, Walczak S. Dressing your online auction business for success: an experiment
comparing two eBay businesses. MIS Q 2008;32(3):65370.
Haubl G, Popkowski-Leszczyc PT. Bidding frenzy: intensity of competitive interaction
among bidders and product valuation in auctions. Adv Consum Res 2004;31:913.
Herrmann GM. Garage sales make good neighbors: building community through
neighbourhood sales. Hum Organ 2006;65(2):18191.
Herschlag M, Zwick R. Internet auctions popular and professional literature review.
Q J Electron Commer 2002;1(2):16186.
Higgins ET, Scholer AA. Engaging the customer: the science and art of the value creation
process. J Consum Psychol 2009;19(2):10014.
Higie RA, Feick LF. Enduring involvement: conceptual and measurement issues. Adv
Consum Res 1989;16:6906.
Holbrook M, Hirschman EC. The experiential aspects of consumption: consumer
fantasies, feelings, and fun. J Consum Res 1982;9(2):13240.
Homans G. Social behavior as exchange. Am J Sociol 1956;63:597606.
Homans G. Social behavior: its elementary forms. New York: Harcourt Brace
Jovanovich; 1974.
Kingshott RP. The impact of psychological contracts upon trust and commitment within
supplierbuyer relationships: a social exchange view. Ind Mark Manage 2006;35
(6):72439.
Lambe CJ, Wittmann CM, Spekman RE. Social exchange theory and research in
business-to-business relational exchange. J Bus Bus Mark 2001;8(3):1-36.
Lastovicka J, Fernandez KV. Three paths to disposition: the movement of meaningful
possessions to strangers. J. Consum. Res. 2005;31(4):81322.
Lawler EJ. An affect theory of social exchange. Am J Sociol 2001;107(2):32152.
Lazarsfeld PF. Some remarks on typological procedures in social research. In: Lazarsfeld
PF, Boudon R, editors. Paul Z. Lazarsfeld: on social research and its language.
Chicago: The University of Chicago Press; 1993. p. 15867.
Lee MY, Kim YK, Kim HY. Segmenting online auction consumers. J Customer Behav
2008;7(2):13548.
Li JJ. How to retain local senior managers in international joint ventures: the effects of
alliance relationship characteristics. J Bus Res 2008;61(9):98694.
Luo X. Trust production and privacy concerns on the Internet: a framework based on
relationship marketing and social exchange theory. Ind Mark Manage 2002;31(2):
1118.
MacManus R. TradeMe: big sh in a small pond; 2006. Retrieved 3/18/06 from http://
www.readwriteweb.com/archives/trademe_big_sh_small_pond.php.
McKee D, Wang G. Economic versus social exchange in marketing places: an empirical
study among manufacturing rms. J Bus Res 2006;59(4):397406.
Mollen A, Wilson H. Engagement, telepresence and interactivity in online consumer
experience: reconciling scholastic and managerial perspectives. J Bus Res 2010;63
(910):91925.
Muniz AM, O'Guinn TC. Brand community. J. Consum. Res. 2001;27(4):41232.
Nissanoff D. FutureShop: how the new auction culture will revolutionize the way we
buy, sell and get the things we really want. New York: The Penguin Press; 2006.
Owen WF. Interpretive themes in relational communication. Q J Speech 1984;70:
27487.

Perreault WD, Leigh LE. Reliability of nominal data based on qualitative judgments.
J Mark Res 1989;26:13548.
Peters C, Bodkin CD. An exploratory investigation of problematic online auction
behaviors: experiences of eBay users. J Retailing Consum Serv 2007;14(1):1-16.
QSR-International. QSR NVivo 8 [software]; 2008.
Rafaeli S, Noy A. Online auctions, messaging, communication and social facilitation: a
simulation and experimental evidence. Eur J Inf Syst 2002;11:196207.
Rauniar R, Rawaski G, Crumbly J, Simms J. C2C online auction website performance:
buyer's perspective. J Electron Commer Res 2009;10(2):5675.
Reynolds KE, Gilkeson JH, Niedrich RW. The inuence of seller strategy on the winning
price in online auctions: a moderated mediation model. J Bus Res 2009;62(1):
2230.
Rheingold H. Introduction to the virtual community. In: Gelder K, editor. The
subcultures reader, 2nd edNew York: Routledge; 2005. p. 51829.
Richard OC, Ismail KM, Bhuian SN, Taylor EC. Mentoring in supervisorsubordinate
dyads: antecedents, consequences, and test of a mediation model of mentorship.
J Bus Res 2009;62(11):11108.
Rohm AJ, Swaminathan V. A typology of shoppers based on shopping motivations. J Bus
Res 2004;57(7):74857.
Ryan RM, Deci EL. Self-determination theory and the facilitation of instrinsic
motivation, social development, and well-being. Am Psychol 2000;55(1):6878.
Sahlins M. On the sociology of primitive exchange. In: Banton M, editor. The relevance
of models for social anthropology. Routledge: London; 1965. p. 139236.
Schau HJ, Muniz AM, Arnould EJ. How brand community practices create value. J Mark
2009;73(5):3051.
Scott J, Craig-Lees M. Audience engagement and its effects on product placement
recognition. J Promot Manage 2010;16(1/2):3958.
Sherry JF. A sociocultural analysis of a Midwestern American ea market. J Consum Res
1990;17(1):1330.
Simonson I. Buying or playing? Behavior in online auctions. Adv Consum Res 2002;29
(1):2612.
Solomon MR. Consumer behavior: buying, having and being. Upper Saddle River, NJ:
Prentice Hall; 2008.
Sprott D, Czellar S, Spangenberg E. The importance of a general measure of brand
engagement on market behavior: development and validation of a scale. J Mark Res
2009;46(1):92-104.
Stern BB, Stafford MR. Individual and social determinants of winning bids in online
auctions. J Consum Behav 2006;5:4355.
Taylor SJ, Bogdan R. Introduction to qualitative research methods: a guidebook and
resource. New York: John Wiley & Sons; 1998.
To PL, Liao C, Lin TH. Shopping motivation on Internet: a study based on utilitarian and
hedonic value. Technovation 2007;27(12):77487.
Turban E, King D. Introduction to e-commerce. Upper Saddle River, NJ: Prentice Hall;
2003.
WebsiteTrafcSpy. Trademe.co.nz overview; 2010. Retrieved 9/21/10 http://www.
websitetrafcspy.com/trademe.co.nz.
Webster FE. The changing role of marketing in the corporation. J Mark 1993;56(4):
1-17.
Welsh E. Dealing with data: using NVivo in the qualitative data analysis process. Forum
Qual Soc Res 2002;3(2) Retrieved 3/3/09 from www.qualitative-research.net/fqs.
Wilcox R. Experts and amateurs: the role of experience in Internet auctions. Mark Lett
2000;11(4):36374.
Wolnbarger M, Gilly M. Shopping online for freedom, control, and fun. Calif Manage
Rev 2001;43(2):3455.
Woodside AG. Case study research: theory, methods, and practice. Bingley, UK:
Emerald; 2010.
Yen CH, Lu HP. Factors inuencing online auction repurchase intention. Internet Res
2008;18(1):7-25.
Zhou M, Dresner M, Windle R. Revisiting feedback systems: trust building in digital
markets. Inf Manage 2009;46(5):27984.