This paper considers a two-stage development problem for information goods with costless quality degradation. In our model, a seller of information goods faces customers that are heterogeneous with regard to both the marginal willingness to pay for quality and the outside opportunity. In the development stage, the seller determines the quality limit of the product. In the second stage, the sell...

Electronic shopping is a rapidly expanding market and can reap beneets from the employment of user modeling techniques in order to personalize the shopping procedure for each customer. In this paper we present a methodology for user modeling that uses attribute grammars to extract a user representation from the navigation steps and actions the user takes inside the electronic shop. This method ...

Research into the determinants of online auction prices has tended to group them into buyer factors, seller factors and site factors. A case is presented which records how a $30 handbag was sold for $ 22,750 in an online auction shortly after a national sport final. Analysis of the case indicates additional factors which can exert a considerable influence on the final auction price. A model is ...

We study auctioning multiple units of the same good to potential buyers with single unit demand (i.e. every buyer wants only one unit of the good). Depending on the objective of the seller, different selling mechanisms are desirable. The Vickrey auction with a truthful reserve price is optimal when the objective is efficiency allocating the units to the parties who values them the most. The Mye...

We consider marketplaces where buyers and sellers iteratively encounter to trade. Given some specific trade conditions, the question that we address is what strategies should buyers and sellers use to maximize gains. We focus on electronic markets where supply shortages are common. Under such market conditions sellers can only satisfy a subset of the purchase-orders they receive from buyers. Co...

In this paper, we use reinforcement learning (RL) techniques to determine dynamic prices in an electronic monopolistic retail market. The market that we consider consists of two natural segments of customers, captives and shoppers. Captives are mature, loyal buyers whereas the shoppers are more price sensitive and are attracted by sales promotions and volume discounts. The seller is the learnin...

Online markets, like eBay, Amazon and others rely on electronic reputation or “feedback” systems to curtail moral hazard and promote trust among participants in the marketplace. These systems are based on the idea that providing information about a trader’s past behavior (performance on previous market transactions) allows market participants to form judgments regarding the trustworthiness of p...

This paper analyzes the clustering of trades on the Australian Stock Exchange (ASX) with respect to the trade direction variable. The ASX is a limit order market operating an electronic limit order book. The order book consists of buy limit orders (bids) and sell limit orders (asks). A trade takes place if a new order arrives which matches an existing order in the limit order book. If the match...

I introduce a strategic seller to a standard model of real options. A privately informed seller, such as a startup, tries to court a forward-looking buyer, such as a venture capitalist. The buyer learns gradually about the seller’s quality, high or low, through exogenous news and can “adopt” the seller at any time. The seller pays a flow cost but can exit or privately upgrade its quality at any...