The Fixed Price Offer Mechanism in Trade Me Online Auctions
Type of content
Discussion / Working Papers
UC permalink
Publisher's DOI/URI
Thesis discipline
Degree name
Publisher
University of Canterbury. Department of Economics and Finance
Journal Title
Journal ISSN
Volume Title
Language
Date
2010
Authors
Hogan, S.
Kidd, H.
Meriluoto, L.
Smith, A.
Abstract
The Fixed Price Offer (FPO) mechanism in Trade Me auctions allows sellers to make a take-it-or-leave-it offer at the conclusion of an unsuccessful auction. We investigate the effects of the FPO option on strategies and outcomes in independent-value auctions. The FPO option induces some bidders with a value above the seller’s reserve to wait for an FPO instead of bidding. Overall, the FPO option increases the probability of sale but reduces expected seller revenue compared to a standard auction. The impact of the FPO option is reduced when the number of bidders increases.
Description
WORKING PAPER
No. 51/2010
Citation
Hogan, S., Kidd, H., Meriluoto, L., Smith, A. (2010) The Fixed Price Offer Mechanism in Trade Me Online Auctions. Department of Economics and Finance Working Paper Series..
Keywords
fixed price offer, private value auction, on-line auction, optimal reserve price, second chance offer
Ngā upoko tukutuku/Māori subject headings
ANZSRC fields of research
Fields of Research::38 - Economics::3802 - Econometrics::380203 - Economic models and forecasting