Chen, Jong-Rong and Chen, Kong-Pin and Chou, Chien-Fu and Huang, Ching-I (2006): A dynamic model of auctions with buy-it-now: theory and evidence.
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In the ascending-price auctions with Yahoo!-type buy-it-now (BIN), we characterize and derive the closed-form solution for the optimal bidding strategy of the bidder and the optimal BIN price of the seller when they are both risk-averse. The seller is shown to be strictly better o with the BIN option, while the bidders are better o only when their valuation is greater than a threshold value. The theory also implies that the expected transaction price is higher in an auction with an optimal BIN price than one without a BIN. This prediction is conrmed by our data collected from Taiwan's Yahoo! auctions of Nikon digital cameras.
|Item Type:||MPRA Paper|
|Original Title:||A dynamic model of auctions with buy-it-now: theory and evidence|
|Keywords:||online auction, but-it-now, risk-aversion|
|Subjects:||L - Industrial Organization > L8 - Industry Studies: Services > L81 - Retail and Wholesale Trade ; e-Commerce
D - Microeconomics > D4 - Market Structure, Pricing, and Design > D44 - Auctions
D - Microeconomics > D0 - General > D02 - Institutions: Design, Formation, Operations, and Impact
|Depositing User:||Kong-Pin Chen|
|Date Deposited:||27 Apr 2012 00:30|
|Last Modified:||14 Dec 2016 12:30|
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