SHILL BIDDING IN ONLINE ENGLISH AUCTIONS WITH A RANDOM NUMBER OF BIDDERS

Jun Ma, Shouyang Wang and K. K. Lai ()
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Jun Ma: School of Management, University of International Business and Economics, Beijing 100029, China
Shouyang Wang: Institute of Systems Science, Academy of Mathematics and Systems Sciences, Chinese Academy of Sciences, Beijing 100080, China;
K. K. Lai: Department of Management Sciences, City University of Hong Kong, Tat Chee Avenue, Kowloon, Hong Kong, China

International Journal of Information Technology & Decision Making (IJITDM), 2004, vol. 03, issue 04, 539-562

Abstract: Shill bidding has increased substantially with the explosion in the number of online auctions. For English auctions with conventional intermediation fee schedules and a continuous increment of the bid, sellers may profit from shill bidding, which is illegal. To deter shill bidding, Wanget al.31designed a mechanism — the shill-deterrent fee schedule (SDFS) which makes shill bidding unprofitable. This paper analyzes the feasibility of applying SDFS rules to both single round and multi-round English auctions in a framework of independent private value (IPV) with a random number of bidders. It is shown that most of the results in Wanget al.31remain true at our cases. In addition, we also propose an approach for sellers to reset the subsequent reserves in multi-round English auctions.

Keywords: Independent private value (IPV); shill bidding; online auctions; single round auctions; multi-round auctions (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (1)

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DOI: 10.1142/S0219622004001239

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