Is Last Minute Bidding Bad?
نویسنده
چکیده
Last minute bidding on internet auctions is not compatible with standard private value (PV) settings. However, it can be rationalized by adding (at least) another identical auction. In the sequential ebay auction model, it can be proved that the last minute bidding equilibrium, in which bidders only bid at the last minute, is the unique symmetric perfect Bayesian equilibrium in (weakly) undominated strategies. Moreover, bidders would sometimes shade their last minute bids as in a first price auction. Nevertheless, revenue equivalence results show that last minute bidding does not hurt the seller, in contrast to the non-transmission model where last minute bidding is not efficient and lowers sellers’ revenue. Thirdly, a bidder’s maximum willingness to pay for the current stage depends on others’ types. This introduces a “common value” component to the private value environment. Empirically, online event ticket auction data shows some support of the sequential model, while laboratory experiments reject the alternative nontransmission model. ∗Preliminary. Comments welcomed. Please do not quote without permission.
منابع مشابه
Gone in 60 Seconds: Last-minute Bidding on Ebay Auctions
This is a theoretical and empirical study of the delay of bid submission due to strategic last-minute bidding in eBay. We consider a two-period model in which two identical items are auctioned sequentially by different sellers. We show that there is a symmetric equilibrium in which the bidders wait until the last minute to submit their bids in the first auction. The last-minute bidding arises f...
متن کاملLast-Minute Bidding in Sequential Auctions with Unobserved, Stochastic Entry
We present a model of repeated, ascending price auctions for homogeneous goods with unobserved, stochastic entry. Bidders have unit demands; they exit if they win, and bid again if they lose. We show that, in equilibrium, entrants always bid in the next-toclose auction and bidders always bid at the last minute. The more bidders present, the lower is the continuation value of future auctions, so...
متن کاملLast-minute bidding in eBay charity auctions
Consumers are frequently presented opportunities to purchase products that are linked to charitable causes, green production, or fair trade practices. In Elfenbein and McManus (forthcoming) we demonstrate that consumers are willing to pay a premium for these items by analyzing a hand-matched data set of identical items sold in charity and non-charity auctions on eBay. This premium may occur bec...
متن کاملLast-Minute Bidding and the Rules for Ending Second-Price Auctions: Evidence from eBay and Amazon Auctions on the Internet
Auctions on the Internet provide a new source of data on how bidding is in uenced by the detailed rules of the auction. Here we study the second-price auctions run by eBay and Amazon, in which a bidder submits a reservation price and has this (maximum) price used to bid for him by proxy. That is, a bidder can submit his reservation price (called a proxy bid) early in the auction and have the r...
متن کامل