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Abstract

EBay and Yahoo allow sellers to list their auctions with a buy price at which a bidder may purchase the item immediately. On eBay, the buy-now option disappears once a bid is placed, while on Yahoo the buy-now option remains in effect throughout the auction. We show that when bidders are risk averse, both types of auctions raise seller revenue for a wide range of buy prices. The Yahoo format raises more revenue than the eBay format when bidders have either CARA or DARA. Bidders with DARA prefer the eBay auction, while bidders with CARA are indifferent between the two. [PUBLICATION ABSTRACT]

Details

Title
Auctions with a buy price
Author
Reynolds, Stanley S; Wooders, John
Pages
9-39
Publication year
2009
Publication date
Jan 2009
Publisher
Springer Nature B.V.
ISSN
09382259
e-ISSN
1432-0479
Source type
Scholarly Journal
Language of publication
English
DOI
https://doi.org/10.1007/s00199-006-0182-7
ProQuest document ID
224139285
Copyright
Springer-Verlag 2008