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Marketing and Designing Transaction Games

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  • Steven M. Shugan

    () (Warrington College of Business, University of Florida, 201 Bryan Hall, Box 117155, Gainesville, Florida 32611)

Abstract

Past research reveals an extraordinary number and variety of transaction games, often with different rules. For example, buy and sell offers can be take-it-or-leave-it, irrevocable, of limited duration, negotiable, contingent on events, et cetera. The possible sets of rules seem endless. Past (often, very insightful) research has focused on optimization, given particular rules of the game. This focus often overlooks why players choose to play the game. Indeed, assuming that an exchange will occur makes the marketing function (e.g., facilitating exchanges) inconsequential. Unlike inescapable market games between rival firms, buyers and sellers often choose whether to play transaction games. Hence, game design (i.e., setting the rules of the game) becomes vital, because the design determines both the likelihood of desirable outcomes (e.g., the best transaction price) and whether (or how many) players will choose to play. We need more research revealing the desirability of various rule sets for different target groups and revealing rules that enhance the benefits to all players. For example, a particular auction game might provide sellers with liquidity (i.e., faster transactions) while providing buyers with unique items at bargain prices. We should also explore the interaction of rules and player benefits (e.g., liquidity, anonymity, likelihood of a transaction, etc.).

Suggested Citation

  • Steven M. Shugan, 2005. "Marketing and Designing Transaction Games," Marketing Science, INFORMS, vol. 24(4), pages 525-530.
  • Handle: RePEc:inm:ormksc:v:24:y:2005:i:4:p:525-530
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    File URL: http://dx.doi.org/10.1287/mksc.1050.0174
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Steven M. Shugan, 2006. "Editorial: Who Is Afraid to Give Freedom of Speech to Marketing Folks?," Marketing Science, INFORMS, vol. 25(5), pages 403-410, September.
    2. Aradhna Krishna & M. Utku Ünver, 2008. "Research Note—Improving the Efficiency of Course Bidding at Business Schools: Field and Laboratory Studies," Marketing Science, INFORMS, vol. 27(2), pages 262-282, 03-04.
    3. Fabio Caldieraro & Anne T. Coughlan, 2007. "Spiffed-Up Channels: The Role of Spiffs in Hierarchical Selling Organizations," Marketing Science, INFORMS, vol. 26(1), pages 31-51, 01-02.
    4. Sandy D. Jap & Prasad A. Naik, 2008. "BidAnalyzer: A Method for Estimation and Selection of Dynamic Bidding Models," Marketing Science, INFORMS, vol. 27(6), pages 949-960, 11-12.
    5. Alok Gupta & Stephen Parente & Pallab Sanyal, 2012. "Competitive bidding for health insurance contracts: lessons from the online HMO auctions," International Journal of Health Economics and Management, Springer, vol. 12(4), pages 303-322, December.
    6. Andrés Musalem & Yogesh V. Joshi, 2009. "—How Much Should You Invest in Each Customer Relationship? A Competitive Strategic Approach," Marketing Science, INFORMS, vol. 28(3), pages 555-565, 05-06.
    7. Steven M. Shugan, 2006. "Editorial: Fifty Years of," Marketing Science, INFORMS, vol. 25(6), pages 551-555, 11-12.
    8. Raphael Thomadsen & Robert Zeithammer & Ganesh Iyer & Dina Mayzlin & Yesim Orhun & Amit Pazgal & Devavrat Purohit & Ram Rao & Michael Riordan & Jiwoong Shin & Monic Sun & Miguel Villas-Boas, 2012. "A reflection on analytical work in marketing: Three points of consensus," Marketing Letters, Springer, vol. 23(2), pages 381-389, June.
    9. Robert Zeithammer, 2007. "—Optimal Selling in Dynamic Auctions: Adaptation Versus Commitment," Marketing Science, INFORMS, vol. 26(6), pages 859-867, 11-12.
    10. Richard Engelbrecht-Wiggans & Ernan Haruvy & Elena Katok, 2007. "A Comparison of Buyer-Determined and Price-Based Multiattribute Mechanisms," Marketing Science, INFORMS, vol. 26(5), pages 629-641, 09-10.
    11. Steven M. Shugan, 2006. "Editorial: Save Research—Abandon the Case Method of Teaching," Marketing Science, INFORMS, vol. 25(2), pages 109-115, 03-04.
    12. Ramanathan Subramaniam & R. Venkatesh, 2009. "Optimal Bundling Strategies in Multiobject Auctions of Complements or Substitutes," Marketing Science, INFORMS, vol. 28(2), pages 264-273, 03-04.

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