IDEAS home Printed from https://ideas.repec.org/p/cca/wpaper/432.html
   My bibliography  Save this paper

Curious about the price? Consumers' behavior in price reveal auctions

Author

Listed:
  • Andrea Gallice
  • Giuseppe Sorrenti

Abstract

We exploit several specific features of a recent online selling mechanism, the so- called price reveal auction, to empirically investigate how consumers' behavior changes in response to an item's intrinsic characteristics and 'social attributes'. We document a significant effect of the item's brand and intended use (outdoor vs. indoor) in influencing an agent's degree of impatience and willingness to pay. We show that, while both vari- ables have some explanatory power when considered in isolation, it is their interaction that really matters. We also study the determinants of the mechanism's profitability and show how, in the context of a price reveal auction, the sale of positional goods may backfire and harm revenues.

Suggested Citation

  • Andrea Gallice & Giuseppe Sorrenti, 2015. "Curious about the price? Consumers' behavior in price reveal auctions," Carlo Alberto Notebooks 432, Collegio Carlo Alberto.
  • Handle: RePEc:cca:wpaper:432
    as

    Download full text from publisher

    File URL: https://www.carloalberto.org/wp-content/uploads/2018/11/no.432.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Gallice Andrea, 2016. "Price Reveal Auctions," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 16(2), pages 485-514, June.
    2. Brennan C. Platt & Joseph Price & Henry Tappen, 2010. "Pay-to-Bid Auctions," NBER Working Papers 15695, National Bureau of Economic Research, Inc.
    3. Andrea Gallice, 2009. "Lowest Unique Bid Auctions with Signals," Carlo Alberto Notebooks 112, Collegio Carlo Alberto, revised Sep 2009.
    4. Harold Houba & Dinard Laan & Dirk Veldhuizen, 2011. "Endogenous entry in lowest-unique sealed-bid auctions," Theory and Decision, Springer, vol. 71(2), pages 269-295, August.
    5. Krishna, Vijay, 2009. "Auction Theory," Elsevier Monographs, Elsevier, edition 2, number 9780123745071.
    6. Robert Östling & Joseph Tao-yi Wang & Eileen Y. Chou & Colin F. Camerer, 2011. "Testing Game Theory in the Field: Swedish LUPI Lottery Games," American Economic Journal: Microeconomics, American Economic Association, vol. 3(3), pages 1-33, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gallice Andrea, 2016. "Price Reveal Auctions," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 16(2), pages 485-514, June.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Andrea Gallice, 2010. "Price Reveal Auctions on the Internet," Carlo Alberto Notebooks 147, Collegio Carlo Alberto.
    2. Wang, Zhongmin & Xu, Minbo, 2013. "Selling a Dollar for More Than a Dollar? Evidence from Online Penny Auctions," Discussion Papers dp-13-15, Resources For the Future.
    3. Marco Scarsini & Eilon Solan & Nicolas Vieille, 2010. "Lowest Unique Bid Auctions," Papers 1007.4264, arXiv.org.
    4. Toomas Hinnosaar, 2013. "Penny Auctions are Unpredictable," Carlo Alberto Notebooks 305, Collegio Carlo Alberto.
    5. Yamada, Takashi & Hanaki, Nobuyuki, 2016. "An experiment on Lowest Unique Integer Games," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 463(C), pages 88-102.
    6. Hinnosaar, Toomas, 2016. "Penny auctions," International Journal of Industrial Organization, Elsevier, vol. 48(C), pages 59-87.
    7. Wang, Zhongmin & Xu, Minbo, 2016. "Selling a dollar for more than a dollar? Evidence from online penny auctions," Information Economics and Policy, Elsevier, vol. 36(C), pages 53-68.
    8. Rui Hu & Jinzhong Guo & Qinghua Chen & Tao Zheng, 2017. "The Psychological Force Model for Lowest Unique Bid Auction," Computational Economics, Springer;Society for Computational Economics, vol. 50(4), pages 655-667, December.
    9. Mohlin, Erik & Östling, Robert & Wang, Joseph Tao-yi, 2015. "Lowest unique bid auctions with population uncertainty," Economics Letters, Elsevier, vol. 134(C), pages 53-57.
    10. Gallice Andrea, 2016. "Price Reveal Auctions," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 16(2), pages 485-514, June.
    11. Nadir Altinok & Abdurrahman Aydemir, 2015. "The Unfolding of Gender Gap in Education," Working Papers 934, Economic Research Forum, revised Aug 2015.
    12. Eichberger, Jürgen & Vinogradov, Dmitri, 2016. "Efficiency of Lowest-Unmatched Price Auctions," Economics Letters, Elsevier, vol. 141(C), pages 98-102.
    13. Mohlin, Erik & Östling, Robert & Wang, Joseph Tao-yi, 2020. "Learning by similarity-weighted imitation in winner-takes-all games," Games and Economic Behavior, Elsevier, vol. 120(C), pages 225-245.
    14. Robert Östling & Joseph Tao-yi Wang & Eileen Y. Chou & Colin F. Camerer, 2011. "Testing Game Theory in the Field: Swedish LUPI Lottery Games," American Economic Journal: Microeconomics, American Economic Association, vol. 3(3), pages 1-33, August.
    15. Cancan Zhou & Hongguang Dong & Rui Hu & Qinghua Chen, 2015. "Smarter than Others? Conjectures in Lowest Unique Bid Auctions," PLOS ONE, Public Library of Science, vol. 10(4), pages 1-13, April.
    16. Erik Mohlin & Robert Ostling & Joseph Tao-yi Wang, 2014. "Learning by Imitation in Games: Theory, Field, and Laboratory," Economics Series Working Papers 734, University of Oxford, Department of Economics.
    17. Costa-Gomes, Miguel A. & Shimoji, Makoto, 2014. "Theoretical approaches to lowest unique bid auctions," Journal of Mathematical Economics, Elsevier, vol. 52(C), pages 16-24.
    18. Alexander Matros & Andriy Zapechelnyuk, 2010. "Competition of E-Commerce Intermediaries," Working Papers 675, Queen Mary University of London, School of Economics and Finance.
    19. Miettinen, Paavo, 2017. "Information acquisition during a descending price auction with asymmetrically informed players," Research Discussion Papers 5/2017, Bank of Finland.
    20. Pierre Bernhard & Marc Deschamps, 2017. "On Dynamic Games with Randomly Arriving Players," Dynamic Games and Applications, Springer, vol. 7(3), pages 360-385, September.

    More about this item

    Keywords

    price reveal auction; willingness to pay; social attributes; positional goods;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cca:wpaper:432. 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: (Giovanni Bert). General contact details of provider: https://edirc.repec.org/data/fccaait.html .

    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 CitEc recognized a reference but did not link an item in RePEc 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 RePEc Author Service 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.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.