Simultaneous online auctions: decisions on reserve prices. (1st January 2011)

• Record Type: Journal Article
• Authors: Zhou, Ming; Zhou, Shu; Yang, Dayong
• Is Part Of: International journal of information and decision sciences. Volume 3:Number 2(2011)
• Page Start: 189
• Page End: 201
• Publication Date: 2011-01-01
• Subjects: online auctions -- simultaneous auctions -- reserve prices -- decision-making -- game theory; Decision making -- Periodicals; Decision support systems -- Periodicals; Management science -- Periodicals; 658.40305
• Languages: English
• ISSNs: 1756-7017

Abstract

The simultaneous nature of online auctions changes the horizon a bidder faces. A seller then has to make strategic and/or operational changes in order to adapt. In this study, a three-stage game model is constructed to analyse seller reserve price setting decision in online auctions. The decision of whether a seller should set a reserve price is shown to be a function of the covariance (between expected seller profits and expected rivals) and the expected number of bidders, where the covariance term is jointly determined by possible actions of other sellers.