Internet auctions with a temporary buyout option

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

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: Internet auction, temporary buyout option
• Subjects: D - Microeconomics > D4 - Market Structure, Pricing, and Design > D44 - Auctions

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