Bidding Strategies in Internet Parallel Auctions
27 Pages Posted: 2 Jan 2008
Date Written: December 14, 2007
Abstract
This paper proposes a simple model for multiple second-price auctions which run parallel to each other, in the sense that though they might not begin or end at the same time, they have certain periods of overlap. We characterize the equilibrium bidding strategy of the buyers and the equilibrium price of each auction. Last-minute bids arise naturally in the equilibrium. We show that, except for the last auction, the maximum price a buyer is willing to pay is less than his valuation, and that the ex ante expected transaction prices are identical for all auctions. A simple empirical test is also performed to verify the theoretical implication of the model.
Keywords: online auctions, parallel auctions, last-minute bids, eBay
JEL Classification: C73, D42, D82, L1
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
By Axel Ockenfels and Alvin E. Roth
-
An Experimental Analysis of Ending Rules in Internet Auctions
By Dan Ariely, Axel Ockenfels, ...
-
By Stanley S. Reynolds and John Wooders
-
Strategic Implications of Uncertainty Over One's Own Private Value in Auctions
-
By Axel Ockenfels, David Reiley, ...
-
Temporary and Permanent Buyout Prices in Online Auctions
By Shobhit Gupta and Jérémie Gallien
-
Buy it Now: A Hybrid Internet Market Institution
By Steven T. Anderson, Daniel Friedman, ...
-
How to Gather Data Using a Web Crawler: An Application Using SAS to Search Edgar
-
By Steven T. Anderson, Daniel Friedman, ...