Munich Personal RePEc Archive

Internet auctions with a temporary buyout option

Che, Xiaogang (2009): Internet auctions with a temporary buyout option.

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Abstract

In an Internet auction, bidders sequentially decide whether or not to enter, and each bidder has to pay a participation cost. In this paper we model an Internet auction with a temporary buyout option. Our main result shows that under certain condition, offering a temporary buyout price would encourage entry of risk neutral bidders, and hence enable the seller to increase expected payoff.

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