Bidding Strategies in Internet Parallel Auctions

27 Pages Posted: 2 Jan 2008

See all articles by Ching-I Huang

Ching-I Huang

National Taiwan University - Department of Economics

Kong-Pin Chen

Academia Sinica - Research Center for Humanities and Social Sciences; National Taiwan University - Department of Economics

Jong-Rong Chen

National Central University at Taiwan

Chien-Fu Chou

National Taiwan University - Department of Economics

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

Huang, Ching-I and Chen, Kong-Pin and Chen, Jong-Rong and Chou, Chien-Fu, Bidding Strategies in Internet Parallel Auctions (December 14, 2007). Available at SSRN: https://ssrn.com/abstract=1079943 or http://dx.doi.org/10.2139/ssrn.1079943

Ching-I Huang

National Taiwan University - Department of Economics ( email )

21 Hsiu Chow Rd
Taipei, 10020
Taiwan

Kong-Pin Chen (Contact Author)

Academia Sinica - Research Center for Humanities and Social Sciences ( email )

RCHSS
Academia Sinica
Nankang, Taipei, 11529
Taiwan
886 2 2789 8160 (Phone)
886 2 2785 4160 (Fax)

HOME PAGE: http://idv.sinica.edu.tw/kongpin/

National Taiwan University - Department of Economics

21 Hsiu Chow Rd
Taipei, 10020
Taiwan

Jong-Rong Chen

National Central University at Taiwan ( email )

No. 300, Zhongda Road
Chung-Li Taiwan, 32054
Taiwan

Chien-Fu Chou

National Taiwan University - Department of Economics ( email )

21 Hsiu Chow Rd
Taipei, 10020
Taiwan

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