Consumer-to-Consumer Internet Auction Models

2013 ◽  
pp. 181-194
Author(s):  
Timothy L. Y. Leung ◽  
William J. Knottenbelt
Keyword(s):  
Arrival Rate ◽  
Fixed Time ◽  
Online Auction ◽  
Internet Auction ◽  
Internet Auctions ◽  
Goods And Services ◽  
Auction Models ◽  
Private Values ◽  
Auction Mechanisms ◽  
Operational Behaviour

Internet auctions have become an increasingly common method for exchanging goods and services across the world both among consumers themselves, as well as between businesses and consumers. These Internet auction mechanisms have the scope of incorporating procedures of much greater complexity and variety, and they exhibit characteristics and properties that are quite distinct from conventional auctions. In this paper, the authors provide an experimental study of the performance characteristics and operational behaviour of a number of online auction models, including the fixed time forward auctions, the Vickrey auctions, and models with soft close variable auction times. These online auction models are studied through systematic simulation experiments, based on a series of operational assumptions, which characterize the arrival rate of bids, as well as the distribution from which the private values of buyers are sampled. Suggestions for efficient online auction design and procedures for improving auction performance are given, and the behaviour of the average auction income and average auction duration are quantified and compared.

Consumer-to-Consumer Internet Auction Models

2011 ◽  
Vol 1 (3) ◽  
pp. 17-28 ◽  
Author(s):  
Timothy L. Y. Leung ◽  
William J. Knottenbelt
Keyword(s):  
Arrival Rate ◽  
Fixed Time ◽  
Online Auction ◽  
Internet Auction ◽  
Internet Auctions ◽  
Goods And Services ◽  
Auction Models ◽  
Private Values ◽  
Auction Mechanisms ◽  
Operational Behaviour

Internet auctions have become an increasingly common method for exchanging goods and services across the world both among consumers themselves, as well as between businesses and consumers. These Internet auction mechanisms have the scope of incorporating procedures of much greater complexity and variety, and they exhibit characteristics and properties that are quite distinct from conventional auctions. In this paper, the authors provide an experimental study of the performance characteristics and operational behaviour of a number of online auction models, including the fixed time forward auctions, the Vickrey auctions, and models with soft close variable auction times. These online auction models are studied through systematic simulation experiments, based on a series of operational assumptions, which characterize the arrival rate of bids, as well as the distribution from which the private values of buyers are sampled. Suggestions for efficient online auction design and procedures for improving auction performance are given, and the behaviour of the average auction income and average auction duration are quantified and compared.

Comparative Evaluation of Independent Private Values Distributions on Internet Auction Performance

2012 ◽  
Vol 3 (1) ◽  
pp. 59-71
Author(s):  
Timothy L. Y. Leung ◽  
William J. Knottenbelt
Keyword(s):  
Internet Auction ◽  
Internet Auctions ◽  
Vickrey Auctions ◽  
Common Distribution ◽  
Private Values ◽  
Auction Mechanisms ◽  
The Individual ◽  
Experimental Findings ◽  
Process Simulator ◽  
Independent Private Values

The Independent Private Values (IPV) model is foundational for the analysis of Internet auction performance and is widely used in the study of auction behaviour. The characteristics of this model include the assumptions of privacy and independence where the value of the commodity in question is private to the individual buyers, and that different buyers do not know the values other buyers attached to the commodity. In addition, these values are drawn from a common distribution which is known to the buyers. In probabilistic terms, this essentially amounts to a series of values which are independent and identically distributed. The features and characteristics of the IPV distribution will have a significant impact on auction behaviour, and since a general stochastic analysis of their impact is analytically intractable, here auction performance is studied using an auction process simulator. Both hard close and soft close Internet auctions are studied. In addition, Vickrey auctions and auction mechanisms with multiple bid acceptance are compared and evaluated. From experimental findings, the paper establishes quantitative relationships between the different auction process parameters, deploy suitable IPV distributions to model the characteristics of different communities of bidders, provide suggestions for optimising auction performance, and recommend strategies for efficient auction design.

Nibbling, Sniping, and the Role of Uncertainty in Second-Price, Hard-Close Internet Auctions

2009 ◽  
pp. 1526-1539 ◽  
Author(s):  
Daniel Friesner ◽  
Carl S. Bozman ◽  
Matthew Q. McPherson
Keyword(s):  
Web Sites ◽  
Effective Means ◽  
Online Auction ◽  
Buyer Behavior ◽  
Internet Auctions ◽  
Bidding Strategies ◽  
Goods And Services ◽  
Reservation Prices ◽  
Auction Format

Internet auctions have gained widespread appeal as an efficient and effective means of buying and selling goods and services. This study examines buyer behavior on eBay, one of the most wellknown Internet auction Web sites. eBay’s auction format is similar to that of a second-price, hardclose auction, which gives a rational participant an incentive to submit a bid that is equal to his or her maximum willingness to pay. But while traditional second-price, hard-close auctions assume that participants have reliable information about their own and other bidders’ reservation prices, eBay participants usually do not. This raises the possibility that eBay participants may adapt their bidding strategies and not actually bid their reservation prices because of increased uncertainty. In this article, we empirically examine the bidding patterns of online auction participants and compare our findings to the behavior of bidders in more conventional auction settings.

Online Auctions

2010 ◽  
pp. 418-427 ◽  
Author(s):  
James K. Ho
Keyword(s):  
Theoretical Basis ◽  
Business Models ◽  
Online Auctions ◽  
The State ◽  
Online Auction ◽  
The Internet ◽  
Auction Models ◽  
The Future ◽  
Auction Mechanisms ◽  
Definition Of

The Internet is a new medium of communication connecting potential partners in trade worldwide. The initial frenzy over its promises led to grossly exaggerated valuations of business models that were mere transplantations of existing processes to the alternative channel. Now that the bubble has burst, more sensible and critical thoughts can be turned to true transformations that are creating and nurturing markets of the future. Online auction is one of the very few cases that has held a steady course, as evidenced in the success to date of eBay.com. Founded in September 1995, eBay has become a global trading platform with presence in 39 markets where on any given day, there are more than 113 million listings across 50,000 plus categories. In 2009, at least 86 million people will buy and sell well over $2000 worth of goods every second (www. ebay.com). To survey the state of development of online auctions apart from eBay, on a pragmatic rather than theoretical basis, we examine variations in auction mechanisms, and give examples of implementation online at this writing. The commonly used terminology and definition of auction models can be found in e.g. McAfee and McMillan (1987). For conciseness and consistency, the www prefix and .com suffix are omitted from the URL of corresponding companies, and all lowercase is used throughout.

Nibbling, Sniping, and the Role of Uncertainty in Second-Price, Hard-Close Internet Auctions

2011 ◽  
pp. 177-190
Author(s):  
Daniel Friesner ◽  
Carl S. Bozman ◽  
Matthew Q. McPherson
Keyword(s):  
Web Sites ◽  
Effective Means ◽  
Online Auction ◽  
Buyer Behavior ◽  
Internet Auctions ◽  
Bidding Strategies ◽  
Goods And Services ◽  
Reservation Prices ◽  
Auction Format

Internet auctions have gained widespread appeal as an efficient and effective means of buying and selling goods and services. This study examines buyer behavior on eBay, one of the most well-known Internet auction Web sites. eBay’s auction format is similar to that of a second-price, hard-close auction, which gives a rational participant an incentive to submit a bid that is equal to his or her maximum willingness to pay. But while traditional second-price, hard-close auctions assume that participants have reliable information about their own and other bidders’ reservation prices, eBay participants usually do not. This raises the possibility that eBay participants may adapt their bidding strategies and not actually bid their reservation prices because of increased uncertainty. In this article, we empirically examine the bidding patterns of online auction participants and compare our findings to the behavior of bidders in more conventional auction settings.

scholarly journals Reputation and Internet Auctions: eBay and Beyond

2004 ◽  
Vol 26 (1) ◽  
Author(s):  
Chris Snijders ◽  
Richard Zijdeman
Keyword(s):  
Online Auctions ◽  
Online Auction ◽  
Opportunistic Behavior ◽  
Internet Auctions ◽  
Reputation Mechanisms

AbstractEach day, a countless number of items is sold through online auction sites such as eBay and Ricardo. Though abuse is being reported more and more, transactions seem to be relatively hassle free. A possible explanation for this phenomenon is that the sites’ reputation mechanisms prevent opportunistic behavior. To analyze this issue, we first summarize and extend the mechanisms that affect the probability of sale of an item and its price. We then try to replicate the results as found in four recent papers on online auctions. Our analyses reveal that (1) it makes sense to differentiate between ‘power sellers’ and the less regular users, (2) there are variables that have an effect on sales that are often not controlled for, (3) one should carefully consider how reputation is operationalized, ( 4) neglecting heteroscedastidty in the data can have serious consequences, and (5) there is some support indicating that effects differ across auction sites.

Brand Equity Effects on Bidding Strategies in an Online Environment

2014 ◽  
Vol 10 (2) ◽  
pp. 1-22 ◽  
Author(s):  
Carl S. Bozman ◽  
Matthew Q. McPherson ◽  
Daniel Friesner ◽  
Ching-I Teng
Keyword(s):  
Brand Equity ◽  
Information Resources ◽  
Online Auction ◽  
Online Environment ◽  
Internet Auction ◽  
Bidding Behavior ◽  
Bidding Strategies ◽  
Related Information ◽  
Equity Effects

Internet auction bidders seldom have all the information resources upon which they have learned to comfortably rely. This raises the possibility that internet auction participants depend more on brand related knowledge and employ bidding strategies consistent with heightened valuations of brand related information. This study empirically examines how differences in brand equity affect consumer online auction behavior on eBay. Branded products with objective values (certified coins) are examined for differences in bidding behavior across auctions. The results indicate auction participants employ incremental bidding strategies for preferred brands that have higher prices except when those brands were for coins of the highest quality. Auctions that had sellers who were not power sellers or which did not take Paypal are more prone to attract late or last minute bidders.

A Review of Single-Item Internet Auction Literature and a Model for Future Research

2011 ◽  
pp. 3987-4012
Author(s):  
Jeff Baker ◽  
Jaeki Song
Keyword(s):  
Behavioral Economics ◽  
Conceptual Model ◽  
Empirical Studies ◽  
Empirical Literature ◽  
Future Research ◽  
Internet Auction ◽  
Internet Auctions ◽  
Single Item ◽  
Comprehensive List ◽  
Future Work

Internet auctions have received a considerable amount of attention from researchers. We review recent empirical literature pertaining to single-item Internet auctions and observe that existing work has examined the roles of the auctioneer, bidder, and seller in Internet auctions. As this stream of research matures, research will necessarily move from concept discovery and process explanation to theory deepening. As a first step towards synthesis of findings in Internet auctions, we compile a comprehensive list of the various factors that have been examined in empirical studies and note their general impact upon auction outcome. Based upon this extant research, we propose a conceptual model of Internet auctions as a framework for structuring future work into Internet auctions. We then note the existing economic, psychological, sociological, and cognitive theoretical bases for work on Internet auctions. We conclude by highlighting the potential for behavioral economics to bring unity to Internet auction research and by calling researchers to engage in the work of forging a comprehensive theory of Internet auctions.

Network Effects and the Evolution of Internet Auctions

2011 ◽  
pp. 71-87
Author(s):  
S. Park
Keyword(s):  
Web Site ◽  
Network Effects ◽  
Empirical Support ◽  
The Other ◽  
Network Effect ◽  
The Internet ◽  
Theoretical Studies ◽  
Internet Auctions ◽  
Auction Mechanisms ◽  
Entry Behavior

Based on the weekly data of listings and Web site usage of eBay and Yahoo!Auctions, as well as fee schedules and available auction mechanisms, this chapter provides empirical support of the network effect in Internet auctions: A seller’s expected auction revenue increases with page views per listing on one hand and increased listings raise page views per listing on the other hand. The existence of the network effect between Web site usage and listings explains the first mover’s advantage and the dominance of eBay even with higher fees in the Internet auctions market. Our empirical findings also highlight unique features of Internet auctions, especially in the entry behavior of potential bidders into specific auctions, inviting more theoretical studies of the market microstructure of Internet auctions.

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