A pricing model for group-buying auction based on customers' waiting-time

Mahyar Sharif Vaghefi (), Mahrad Sharif Vaghefi and Neshat Beheshti

Marketing Letters, 2014, vol. 25, issue 4, 425-434

Abstract: Group-buying auction is a new business model in e-commerce. This auction has its own characteristics that make it distinct from other types of auctions. Customers' waiting time is an inherent attribute for group-buying auction. However, this attribute is rarely considered in the previous pricing models. Therefore, finding an appropriate pricing model for it seems to be of great importance. In this paper, with the help of game-theory concepts and according to each customer's waiting time in group-buying auction, a pricing model for a duopolistic market is proposed which takes into account both customers' and sellers' satisfaction. The pricing model shows that customers' awareness of Internet group-buying auction is so important and if it is lower than a boundary value, then the group-buying seller could not compete in the market. The model emphasizes on economies of scale as a significant factor in the success of the auction. The model also stresses the importance of gaining customers with lower product value in the group-buying auction. Copyright Springer Science+Business Media New York 2014

Keywords: Group-buying; Dynamic pricing; Auction; Duopolistic market; E-commerce (search for similar items in EconPapers)
Date: 2014
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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DOI: 10.1007/s11002-013-9262-1

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