Internet auctions with a temporary buyout option
In an Internet auction, bidders sequentially decide whether or not to enter, and each bidder has to pay a participation cost. In this paper we model an Internet auction with a temporary buyout option. Our main result shows that under certain condition, offering a temporary buyout price would encourage entry of risk neutral bidders, and hence enable the seller to increase expected payoff.
|Date of creation:||11 Jun 2009|
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- Jeremy Bulow & Paul Klemperer, 2009.
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- Timothy Mathews & Brett Katzman, 2006. "The role of varying risk attitudes in an auction with a buyout option," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 27(3), pages 597-613, April.
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