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Sequential Internet auctions with different ending rules

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  • Tsuchihashi, Toshihiro

Abstract

Two ending rules, a soft close and a hard close, exist in Internet auctions. The hard close auction involves a fixed deadline, while the deadline in the soft close auction may be extended if at least one bid is submitted in the final few minutes. Thus, the soft close allows buyers to submit ofter observing the opponent's bids even in the last minutes. Ending rules change both the seller's and the buyers’ strategies. In a sequential auction with the soft close, buyers have a stronger incentive to wait for low reserve prices in the future, and a seller chooses lower reserve prices.

Suggested Citation

  • Tsuchihashi, Toshihiro, 2012. "Sequential Internet auctions with different ending rules," Journal of Economic Behavior & Organization, Elsevier, vol. 81(2), pages 583-598.
    • Handle: RePEc:eee:jeborg:v:81:y:2012:i:2:p:583-598
    DOI: 10.1016/j.jebo.2011.08.002
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    References listed on IDEAS

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    More about this item

    Keywords

    Internet auction; Ending rule; Reserve price;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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