Price Reveal Auctions on the Internet
Andrea Gallice ()
No 147, Carlo Alberto Notebooks from Collegio Carlo Alberto
A price reveal auction is a Dutch auction in which the current price of the item on sale remains hidden. Bidders can privately observe the price only by paying a fee, and every time a bidder does so, the price falls by a predetermined amount. We show that in equilibrium, no rational bidder should enter into such an auction. Contrary to this prediction, data about actual price reveal auctions run on the Internet show that bidders do enter and that the mechanism is profitable for the seller.
Keywords: price reveal auctions; pay-per-bid auctions (search for similar items in EconPapers)
JEL-codes: C72 D44 (search for similar items in EconPapers)
Pages: 13 pages
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Persistent link: https://EconPapers.repec.org/RePEc:cca:wpaper:147
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