Bundling Decisions for Selling Multiple Items in Online Auctions

Yeu-Shiang Huang (), Min-Sheng Yang () and Jyh-Wen Ho ()
Additional contact information
Yeu-Shiang Huang: Department of Industrial and Information Management, Center for Innovative FinTech Business Models, National Cheng Kung University, Tainan 70101, Taiwan
Min-Sheng Yang: Department of Industrial and Information Management, National Cheng Kung University, Tainan 70101, Taiwan
Jyh-Wen Ho: Department of Industrial Management and Enterprise Information, Aletheia University, New Taipei City 251, Taiwan

Decision Analysis, 2022, vol. 19, issue 1, 44-62

Abstract: Fueled by the widespread use of the internet, more and more ordinary people have now become merchandise sellers who sell their own possessions, such as antique collections and limited souvenirs, to buyers who are interested in such goods via online auctions. This study examines the decision making related to the bidding strategies used in online auctions by both sellers and buyers. When selling goods for which there is a limited supply, sellers consider whether to sell the single homogenous items in multiple, simultaneous auctions or all the items in a single auction. Moreover, when selling heterogeneous but associated goods, sellers may decide to bundle the items for sale or not with an aim of increasing the potential buyers’ willingness to make a purchase. We investigate the effects that various factors related to the bidding strategies used in online auctions, such as the base price and duration of the auction determined by the seller and the bidding price decided by the buyer, have on the seller’s profit, and the utilities of both parties are considered to derive the equilibrium solutions. This study contributes to the literature by proposing an online auction framework that focuses more on individual sellers selling a limited quantity of items with an aim to establish a favorable online auction for both sellers and buyers and earn more profits for sellers. The results show that the base prices and direct purchase prices should be unestablished to achieve the most attractive characteristics of online auctions, which would encourage more buyers to freely place bids. As a result, the bidding items would have more chances to be eventually obtained by the buyer who places the highest bid, which, thus, maximizes the seller’s profit.

Keywords: online auction; bidding process; bundling (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://dx.doi.org/10.1287/deca.2021.0440 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:inm:ordeca:v:19:y:2022:i:1:p:44-62

Access Statistics for this article

More articles in Decision Analysis from INFORMS Contact information at EDIRC.
Bibliographic data for series maintained by Chris Asher ().