A Simulation-Based Model for Final Price Prediction in Online Auctions
AbstractOnline auctions, a profitable, exciting, and dynamic part of e-commerce, have enjoyed increasing public interest. However, there is still a paucity of literature on final price prediction for online auctions. Although Markov process models provide a mathematical approach to predicting online auction prices, estimating parameters of a Markov process model in practice is a challenging task. In this paper we propose a simulation-based model as an alternative approach to predicting the final price in online auctions. The simulation results show that the proposed model can predict the final price more accurately than a Markov process model. Additionally, the consistent lower predictions of the Markov process model suggest a direction for future research into improving performance in both models.
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Bibliographic InfoArticle provided by College of Business, Feng Chia University, Taiwan in its journal Journal of Economics and Management.
Volume (Year): 3 (2007)
Issue (Month): 1 (January)
Markov process; simulation; e-commerce; auction; final price prediction;
Find related papers by JEL classification:
- C15 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Statistical Simulation Methods: General
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- McAfee, R Preston & McMillan, John, 1987. "Auctions and Bidding," Journal of Economic Literature, American Economic Association, vol. 25(2), pages 699-738, June.
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