Auctions with a buy price

Reynolds, SS; Wooders, J

Auctions with a buy price

Reynolds, SS Wooders, J

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Publication Type:: Journal Article
Citation:: Economic Theory, 2009, 38 (1), pp. 9 - 39
Issue Date:: 2009-01-01

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Field	Value	Language
dc.contributor.author	Reynolds, SS	en_US
dc.contributor.author	Wooders, J https://orcid.org/0000-0002-4206-7137	en_US
dc.date.issued	2009-01-01	en_US
dc.identifier.citation	Economic Theory, 2009, 38 (1), pp. 9 - 39	en_US
dc.identifier.issn	0938-2259	en_US
dc.identifier.uri	http://hdl.handle.net/10453/15748
dc.description.abstract	eBay and Yahoo allow sellers to list their auctions with a buy price at which a bidder may purchase the item immediately. On eBay, the buy-now option disappears once a bid is placed, while on Yahoo the buy-now option remains in effect throughout the auction. We show that when bidders are risk averse, both types of auctions raise seller revenue for a wide range of buy prices. The Yahoo format raises more revenue than the eBay format when bidders have either CARA or DARA. Bidders with DARA prefer the eBay auction, while bidders with CARA are indifferent between the two. © 2006 Springer-Verlag.	en_US
dc.relation.ispartof	Economic Theory	en_US
dc.relation.isbasedon	10.1007/s00199-006-0182-7	en_US
dc.subject.classification	Economic Theory	en_US
dc.title	Auctions with a buy price	en_US
dc.type	Journal Article
utslib.citation.volume	1	en_US
utslib.citation.volume	38	en_US
utslib.for	1401 Economic Theory	en_US
utslib.for	1402 Applied Economics	en_US
utslib.for	1403 Econometrics	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Economics Discipline
utslib.copyright.status	closed_access
pubs.issue	1	en_US
pubs.publication-status	Published	en_US
pubs.volume	38	en_US

Abstract:

eBay and Yahoo allow sellers to list their auctions with a buy price at which a bidder may purchase the item immediately. On eBay, the buy-now option disappears once a bid is placed, while on Yahoo the buy-now option remains in effect throughout the auction. We show that when bidders are risk averse, both types of auctions raise seller revenue for a wide range of buy prices. The Yahoo format raises more revenue than the eBay format when bidders have either CARA or DARA. Bidders with DARA prefer the eBay auction, while bidders with CARA are indifferent between the two. © 2006 Springer-Verlag.

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http://hdl.handle.net/10453/15748