Auctions of Homogeneous Goods with Increasing Returns: Experimental Comparison of Alternative "Dutch" Auctions
Most business-to-business (B2B) auctions are used to transact large quantities of homogeneous goods, and therefore use multiunit mechanisms. In the B2B context, bidders often have increasing returns to scale, or synergies. We compare two commonly used auction formats for selling multiple homogeneous objects, both sometimes called "Dutch" auctions, in a set of value environments that include synergies and potentially subject bidders to the "exposure" and "free-riding" problems. We find that the descending-price auction, best known for its use in the Dutch flower auctions, is robust and performs well in a variety of environments, although there are some situations in which the ascending uniform-price auction similar to the one used by eBay better avoids the free-riding problem. We discuss the factors that influence each mechanism's performance in terms of the overall efficiency, the informational requirements, the seller's revenue, and the buyer's profit.
Volume (Year): 50 (2004)
Issue (Month): 8 (August)
|Contact details of provider:|| Postal: |
Web page: http://www.informs.org/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:inm:ormnsc:v:50:y:2004:i:8:p:1044-1063. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Mirko Janc)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.