A note on buyers' behavior in auctions with an outside option

DOI10.3390/G11030026MaRDI QIDQ2221276zbMATH OpenOpenAlexFDO

Authors Alexander Maslov

Publication date 26 January 2021

Published in Games (Search for Journal in Brave)

Copyright license Creative Commons Attribution 4.0 International

Full work available at URL https://doi.org/10.3390/g11030026

zbMATH Keywords

auctionscompeting mechanismprice posting

Mathematics Subject Classification ID

Auctions, bargaining, bidding and selling, and other market models (91B26)

Review text

The article discusses an interesting upgrade of research related to competition in online markets with auctions and posted prices by \textit{A. Maslov} [Competition in online markets with auctions and posted prices. KSU Coles College of Business Working Paper Series. (2019), \url{https://coles.kennesaw.edu/research/docs/fall-2019/FALL19-02.pdf}]. More precisely, the author show that the equilibrium in cutoff strategies observed in auctions with a buy-it-now price may also arise in markets where objects are sold simultaneously by auctions and posted prices. However, contrary to auctions with a buy-it-now price where buyers need to know only the total number of players in the market, in the latter environment buyers must also observe the number of active bidders in the auction for the equilibrium to exist in cutoff strategies. One of the requirements for a buyer to follow a cutoff strategy is to observe the second-highest order statistic among his opponents. However, in reality, obtaining information specifically on the second order statistic is hardly alienable from the information on the bids of all other buyers. Hence, the condition is generalized to the observance of all active bidders.

Recommendations

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• Auction choice for ambiguity-averse sellers facing strategic uncertainty: comment
• The impact of discounting on an auction with a buyout option: a theoretical analysis motivated by eBay's buy-it-now feature
• Ascending bid auctions with behaviorally consistent bidders
• Optimal Auctions with Risk Averse Buyers

Cites work

• Auctions with a buy price
• Competition in online markets with auctions and posted prices
• Dual mechanism for an online retailer
• Online Auction and List Price Revenue Management
• Posted price selling and online auctions
• The role of varying risk attitudes in an auction with a buyout option

Cited in

(8)

• A note on the buyer's problem
• The impact of the irrelevant: temporary buy-options and bidding behavior in auctions
• A change in the timing of auctions with synergies and its impact on bidding behavior
• Competition in online markets with auctions and posted prices
• BIDDER WELFARE IN AN AUCTION WITH A BUYOUT OPTION
• scientific article; zbMATH DE number 2006592 (Why is no real title available?)
• Developments on Experimental Economics
• Comment on: ``Auctions with a buy price: the case of reference-dependent preferences

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