An Implementation of a New Type of Online Auction

In recent years, there has been an increased interest in the types of online auction. Yet many auctions with fixed-end times are experiencing “sniping” or submission of bids in the final minute of an auction. Late bidding deprives rivals of the ability of seeing one’s bid and undercutting it. Late bidding facilitates colludes or independent pricing well above that predicated by auction mechanism. This article aims to propose and implement a new type of online auction called Least and Unique Price (LUP). In the LUP auction, the winner will be the bidder who submits the least and unique price. Moreover, late bidding and specific closing time also be overcome by the LUP auction. In addition, this article presents the practical implementation of the proposed auction. In order to evaluate the proposed auction a comparative analysis of different auction types and the proposed one has been done.

Sniping and Squatting in Auction Markets

We conducted a field experiment to test the benefit from late bidding (sniping) in online auction markets. We compared sniping to early bidding (squatting) in auctions for newly-released DVDs on eBay. Sniping led to a statistically significant increase in our average surplus. However, this improvement was small. The two bidding strategies resulted in a variety of other qualitative differences in the outcomes of auctions. We show that a model of multiple concurrent auctions, in which our opponents are naïve or incremental bidders as identified in the lab, explain the results well. Our findings illustrate how the overall impact of naïveté, and the benefit from sniping observed in the lab, may be substantially attenuated in real-world market settings. (JEL D44)