Title: Simultaneous online auctions: decisions on reserve prices

Authors: Ming Zhou, Shu Zhou, Dayong Yang

Addresses: Department of Organizations and Management, Lucas Graduate School of Business, San Jose State University, San Jose, CA, 95192-0070, USA. ' Department of Organizations and Management, College of Business, San Jose State University, San Jose, CA, 95192-0070, USA. ' Department of Trade and Economics, School of Business, Renmin University of China, 59 Zhongguancun Avenue, Beijing, 100872, China

Abstract: The simultaneous nature of online auctions changes the horizon a bidder faces. A seller then has to make strategic and/or operational changes in order to adapt. In this study, a three-stage game model is constructed to analyse seller reserve price setting decision in online auctions. The decision of whether a seller should set a reserve price is shown to be a function of the covariance (between expected seller profits and expected rivals) and the expected number of bidders, where the covariance term is jointly determined by possible actions of other sellers.

Keywords: online auctions; simultaneous auctions; reserve prices; decision making; game theory; covariance.

DOI: 10.1504/IJIDS.2011.040423

International Journal of Information and Decision Sciences, 2011 Vol.3 No.2, pp.189 - 201

Published online: 26 May 2011 *

Full-text access for editors Access for subscribers Purchase this article Comment on this article