Buyers, on the other hand, might be uncertain about the quality of the item and the production costs for the seller. [...] The left-hand column of Figure 2 summarizes the behavior observed in the experiment.7 The top left panel in Figure 2 shows the relation between the average posted pre-auction price offer and a non-parametric estimate of the realized seller profits. [...] The horizontal dashed line indicates the auction profit without a pre-auction price offer.8 In the combined mechanism, the seller profit increases with the posted pre-auction price offer up to a certain price and then converges to the profit in the auction without a pre-auction price offer. [...] The information of the eBay traders in the experiment contains past bidding histories, such as the number of bids, the presence of last-minute bids, auction prices, and the experience that traders have with the eBay platform. [...] In any case, as shown in Grebe (2009), all transactions are completed in the auction as all pre-auction price offers will be rejected - they will be either too high in the case when the seller makes the offer, or too low in the case when the buyer makes the offer.
Authors
- Pages
- 15
- Published in
- Canada
