Optimal Price Decremental Strategy for Dutch Auctions∗
نویسندگان
چکیده
In a Dutch auction, the price of an item decreases incrementally from the starting price at regular intervals. A bidder may buy the item at any time and stop the auction at the current price. This paper presents an optimal price decrement strategy in a Dutch auction, such that the expected revenue of the auction host is maximized. Properties of the optimal solution and a simple iterative solution methodology are discussed. Numerical studies show that significant gain could be obtained compared with a simple reference strategy. Subject terms. Dutch auction; optimal auction; bidding; 3G; wireless application protocol; optimization; time discounting; online auction; Technical Subject Area. Mobile Internet: Applications and Technology, Personal Communications
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