The Optimal Listing Strategies in Online Auctions

17 Pages Posted: 30 May 2017

See all articles by Kong-Pin Chen

Kong-Pin Chen

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

Szu‐Hsien Ho

National Taiwan University

Chi‐Hsiang Liu

Hubei University of Economics

Chien‐Ming Wang

Hubei University of Economics

Date Written: May 2017

Abstract

This article proposes a unified framework to completely characterize the seller's optimal listing strategy in the online auction as a function of her rate of time impatience. Specifically, the fixed‐price listing, the regular auction, and the buy‐it‐now (BIN) auction are each a solution of the seller's single optimization problem under different values of the rate of intertemporal discount: The perfectly patient seller adopts the regular auction, the sellers with a medium range of time impatience adopt the BIN auction, and the most impatient of sellers adopt the fixed‐price listing. Moreover, under mild conditions, the reverse price is inversely related to the value of the seller's discount factor, either within or across formats. This in turn implies that the posted price in the fixed‐price sale is greater than the reserve price of the BIN auction, followed by that of the regular auction. These predictions offer clear empirical implications.

Suggested Citation

Chen, Kong-Pin and Ho, Szu‐Hsien and Liu, Chi‐Hsiang and Wang, Chien‐Ming, The Optimal Listing Strategies in Online Auctions (May 2017). International Economic Review, Vol. 58, Issue 2, pp. 421-437, 2017. Available at SSRN: https://ssrn.com/abstract=2976603 or http://dx.doi.org/10.1111/iere.12222

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

Szu‐Hsien Ho

National Taiwan University

1 Sec. 4, Roosevelt Road
Taipei 106, 106
Taiwan

Chi‐Hsiang Liu

Hubei University of Economics

Jiang-xia
Wuchang
Wuhan, 430205
China

Chien‐Ming Wang

Hubei University of Economics

Jiang-xia
Wuchang
Wuhan, 430205
China

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