Bidding behavior and price search in Internet auctions

Radovan Vadovič

International Journal of Industrial Organization, 2017, vol. 54, issue C, 125-147

Abstract: This paper studies bidding behavior in a dynamic auction setting that is similar to auctions offered on the Internet. I allow bidders to acquire outside prices while the auction is in progress. Searching is costly and bidders are heterogeneous in their search costs. The model generates a tractable equilibrium and gives interpretation to three intuitive bidding patterns that are frequently observed in the data: early, late and multiple bidding. The key feature of the equilibrium is that early bidding is monotone in search cost which leads to efficient sorting.

Keywords: Dynamic auction; Internet auction; Information acquisition (search for similar items in EconPapers)
JEL-codes: D44 D83 L86 (search for similar items in EconPapers)
Date: 2017
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:54:y:2017:i:c:p:125-147

DOI: 10.1016/j.ijindorg.2017.06.006

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