Abstract
Reserve price auctions are one of hot research topics in the traditional auction theory. Here we study the starting price in an online auction, counterpart of the public reserve price in a traditional auction. By considering three features of online auctions, the stochastic entry of bidders (subject to Poisson process), the insertion fee proportional to the starting price, and time discount, we have analyzed the properties of extremum points of the starting price for maximizing seller’s expected revenue, and found that, under certain conditions, the optimal starting price should be at the lowest allowable level, which is contrary to results from the classic auction theory and finds its optimality in reality. We have also developed a general extended model of multistage auction and carried out analysis on its properties. At last, some directions for further research are also put forward.
Supported by NSFC and SRG: 7001719 of City University of Hong Kong.
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Yu, H., Wang, S., Dang, C. (2005). Optimal Starting Price in Online Auctions. In: Deng, X., Ye, Y. (eds) Internet and Network Economics. WINE 2005. Lecture Notes in Computer Science, vol 3828. Springer, Berlin, Heidelberg. https://doi.org/10.1007/11600930_31
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DOI: https://doi.org/10.1007/11600930_31
Publisher Name: Springer, Berlin, Heidelberg
Print ISBN: 978-3-540-30900-0
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