Auctions with a buy price: the case of reference-dependent preferences (Q1036592): Difference between revisions

The referred paper contributes to the mathematical modeling of internet auctions with their specific features. Namely, the auctions with buy prices where the seller provides bidders with an option are considered. The model analyzed in the paper differs from the existing literature in two aspects: bidders and seller are risk neutral, and changes in auction prices affect bidding behavior in a predictable way. The main contribution of the paper consists in the analysis of the behavior of participants of such auction, and in the demonstration of the fact that the theoretical structure of that behavior is (in the contrary to the results published in previous literature) consistent with the behavior observed in both, laboratory and real life.