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Curious about the price? Consumers' behavior in price reveal auctions

Andrea Gallice () and Giuseppe Sorrenti ()

No 432, Carlo Alberto Notebooks from Collegio Carlo Alberto

Abstract: We exploit several specific features of a recent online selling mechanism, the so- called price reveal auction, to empirically investigate how consumers' behavior changes in response to an item's intrinsic characteristics and 'social attributes'. We document a significant effect of the item's brand and intended use (outdoor vs. indoor) in influencing an agent's degree of impatience and willingness to pay. We show that, while both vari- ables have some explanatory power when considered in isolation, it is their interaction that really matters. We also study the determinants of the mechanism's profitability and show how, in the context of a price reveal auction, the sale of positional goods may backfire and harm revenues.

Keywords: price reveal auction; willingness to pay; social attributes; positional goods (search for similar items in EconPapers)
JEL-codes: D12 D44 (search for similar items in EconPapers)
Pages: pages 22
Date: 2015
New Economics Papers: this item is included in nep-mkt
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