Price Reveal Auctions on the Internet
AbstractA price reveal auction is a Dutch auction in which the current price of the item on sale remains hidden. Bidders can privately observe the price only by paying a fee, and every time a bidder does so, the price falls by a predetermined amount. We show that in equilibrium, no rational bidder should enter into such an auction. Contrary to this prediction, data about actual price reveal auctions run on the Internet show that bidders do enter and that the mechanism is profitable for the seller.
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Bibliographic InfoPaper provided by Collegio Carlo Alberto in its series Carlo Alberto Notebooks with number 147.
Length: 13 pages
Date of creation: 2010
Date of revision:
price reveal auctions; pay-per-bid auctions;
Find related papers by JEL classification:
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
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