Posted price selling and online auctions

Sajid Anwar; Mingli Zheng

doi:10.1016/j.geb.2014.11.005

Back

Posted price selling and online auctions

Journal article

Open access

Peer reviewed

Posted price selling and online auctions

Sajid Anwar and Mingli Zheng

Games and Economic Behavior, Vol.90, pp.81-92

2015

DOI: https://doi.org/10.1016/j.geb.2014.11.005

Files and links (2)

pdf

PDF - Author's Accepted Version (Open Access)446.56 kBDownload View

Accepted VersionPDF - Author Accepted Version (Open Access)CC BY-NC-ND V4.0, Open Access

url

https://doi.org/10.1016/j.geb.2014.11.005View

Published Version

Abstract

online auctions

posted price selling

buy-it-now

allocative inefficiency

random matching

eBay auctions

In an auction-style listing at eBay, sellers have the option to set a posted price (also known as buy-it-now price), which allows buyers to instantly purchase an item before the start of the auction. This paper provides a rationale for such a selling mechanism. When many identical items are offered for sale and there are many buyers, random matching between auctions and the bidders can cause allocative inefficiency. We show that, with the buy-it-now option, some high valuation buyers buy the item before the start of the auction. In the case of a single seller with many items for sale, this not only reduces the allocative inefficiency, but also increases the seller's expected revenue. In the case of many competing sellers, if sellers choose between the strategies of (i) auction only or (ii) auction with buy-it-now option, the option of buy-it-now will be used with positive probability in any equilibrium.

Details

Title: Posted price selling and online auctions
Authors: Sajid Anwar (Author) - University of the Sunshine Coast - Faculty of Arts and Business
Mingli Zheng (Author) - University of Macau, China
Publication details: Games and Economic Behavior, Vol.90, pp.81-92
Publisher: Academic Press
Date published: 2015
DOI: 10.1016/j.geb.2014.11.005
ISSN: 0899-8256
Organisation Unit: School of Business and Creative Industries; Indigenous and Transcultural Research Centre; University of the Sunshine Coast, Queensland; USC Business School - Legacy
Language: English
Record Identifier: 99448906902621
Output Type: Journal article

Metrics

160 File views/ downloads

870 Record Views

7 Times Cited - Web of Science

InCites Highlights

These are selected metrics from InCites Benchmarking & Analytics tool, related to this output

Collaboration types: Domestic collaboration; International collaboration
Web Of Science research areas: Economics

UN Sustainable Development Goals (SDGs)

This output has contributed to the advancement of the following goals:

Source: InCites