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Increasing Realized Revenue via Profit Redistribution: A Variant of Online Dutch Auction

  • Marin Markov
  • Penka Markova
  • Mukesh Mohania
  • Yahiko Kambayashi
Conference paper
Part of the Lecture Notes in Computer Science book series (LNCS, volume 2738)

Abstract

In this paper we propose a new variant of a Dutch auction with the aim of maximizing the revenue realized from the auctioneer by shifting to him some of the profits from the highest bidders, while at the same time preserving the allocative efficiency achieved in the Dutch auctions. We then develop and analyze a model for this variant that corresponds to a multi-unit, progressively ascending, lowest winning bid open auction. The proposed model achieves the objective through the use of coupons, which may be introduced during the auction and drive up the lowest winning price and respectively the total revenue. This variant of a Dutch auction guarantees that the sum of the face value of all used coupons will be less than (or equal to) the increase in the revenue caused by their use. As a result the realized revenue will be higher than the revenue received in a typical Dutch auction with the same settings.

Keywords

Customer Satisfaction Total Revenue Allocative Efficiency High Bidder Uniform Price 
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 2003

Authors and Affiliations

  • Marin Markov
    • 1
  • Penka Markova
    • 2
  • Mukesh Mohania
    • 3
  • Yahiko Kambayashi
    • 4
  1. 1.Computer Science DepartmentPurdue UniversityWest LafayetteUSA
  2. 2.Departments of Electrical Engineering and Computer ScienceStanford UniversityStanfordUSA
  3. 3.IBM – India Research Laboratory Block I – IIT Hauz KhasNew DelhiIndia
  4. 4.Department of Social InformaticsKyoto UniversityKyotoJapan

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