Bidding behaviors in eBay auctions: secret reservation price and endogenous entry
This paper analyzes the secret reservation price in eBay auctions. Under the assumptions of secret and public reservation price, the bidders choose the optimal bidding function and the seller selects equilibrium reservation price. This model argues that the choice of secret reservation price is rational for the seller, as they can generate higher revenue in certain conditions. It predicts that, under endogenous entry, secret reservation price leads to higher revenue since it attracts more bidders to the auction. This effect is more noticeable for luxury goods. However, secret and public reservation prices generate identical revenue for the seller if entry is exogenous. Furthermore, the results are supported by numerous recent empirical works.
|Date of creation:||2011|
|Publication status:||Published in Journal of Economics and Behavioral Studies 5.3(2011): pp. 326-331|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Bernard Elyakime & Jean-Jacques Laffont & Patrice Loisel & Quang Vuong, 1994.
"First-Price Sealed-Bid Auctions with Secret Reservation Prices,"
Annals of Economics and Statistics,
GENES, issue 34, pages 71-114.
- Elyakime, Bernard & Laffont, Jean-Jacques & Loisel, Patrice & Vuong, Quang, 1993. "First-Price Sealed-Bid Auctions with Secret Reservation Prices," IDEI Working Papers 27, Institut d'Économie Industrielle (IDEI), Toulouse.
- Vuong, Q. & Laffont, J.J. & Elyakime, B. & Loisel, P., 1995. "Auctioning and Bargaining: An Econometric Study of Timber Auctions with Secret Reservation Prices," Papers 9502, Southern California - Department of Economics.
- David Lucking-Reiley & Doug Bryan & Naghi Prasad & Daniel Reeves, 2007. "PENNIES FROM EBAY: THE DETERMINANTS OF PRICE IN ONLINE AUCTIONS -super-," Journal of Industrial Economics, Wiley Blackwell, vol. 55(2), pages 223-233, 06.
- Elyakime, Bernard, et al, 1997. "Auctioning and Bargaining: An Econometric Study of Timber Auctions with Secret Reservation Prices," Journal of Business & Economic Statistics, American Statistical Association, vol. 15(2), pages 209-220, April.
- Levin, Dan & Smith, James L, 1996. "Optimal Reservation Prices in Auctions," Economic Journal, Royal Economic Society, vol. 106(438), pages 1271-1283, September.
- Vincent Daniel R., 1995. "Bidding Off the Wall: Why Reserve Prices May Be Kept Secret," Journal of Economic Theory, Elsevier, vol. 65(2), pages 575-584, April. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:35081. 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: (Joachim Winter)
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.