, Volume 12, Issue 3, pp 155-163
Date: 16 May 2008

Optimal fees in internet auctions

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Abstract

An auction house runs a second-price auction with a possibility of resale through re-auctions. It collects listing and closing fees from the seller. We find the fees which maximize the revenue of the auction house. In particular, we show that the optimal listing fee is zero. Our findings are consistent with the policies of eBay, Amazon, Yahoo, and other Internet auctions.