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Optimal Starting Price in Online Auctions

  • Hai Yu
  • Shouyang Wang
  • Chuangyin Dang
Conference paper
Part of the Lecture Notes in Computer Science book series (LNCS, volume 3828)

Abstract

Reserve price auctions are one of hot research topics in the traditional auction theory. Here we study the starting price in an online auction, counterpart of the public reserve price in a traditional auction. By considering three features of online auctions, the stochastic entry of bidders (subject to Poisson process), the insertion fee proportional to the starting price, and time discount, we have analyzed the properties of extremum points of the starting price for maximizing seller’s expected revenue, and found that, under certain conditions, the optimal starting price should be at the lowest allowable level, which is contrary to results from the classic auction theory and finds its optimality in reality. We have also developed a general extended model of multistage auction and carried out analysis on its properties. At last, some directions for further research are also put forward.

Keywords

Extremum Point Reserve Price Online Auction Expected Revenue Auction Theory 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

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Copyright information

© Springer-Verlag Berlin Heidelberg 2005

Authors and Affiliations

  • Hai Yu
    • 1
    • 2
  • Shouyang Wang
    • 1
    • 2
  • Chuangyin Dang
    • 3
  1. 1.Institute of Systems Science, Academy of Mathematics and Systems ScienceChinese Academy of SciencesBeijingChina
  2. 2.Graduate School of the Chinese Academy of SciencesBeijingChina
  3. 3.Department of Manufacturing Engineering and Engineering ManagementCity University of Hong KongKowloon, Hong Kong

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