A review of research on e-marketplaces 1997-2008
Decision Support Systems
Operational efficiency of decentralized Internet auction mechanisms
Electronic Commerce Research and Applications
Segmenting uncertain demand in group-buying auctions
Electronic Commerce Research and Applications
Selling with Binding Reservations in the Presence of Strategic Consumers
Management Science
On-Line Auctions with Buy-It-Now Pricing: A Practical Design Model and Experimental Evaluation
International Journal of Electronic Commerce
Design of online auctions: Proxy versus non-proxy settings
Decision Support Systems
Optimal mediated auctions with endogenous participation
Decision Support Systems
Managing online sales with posted price and open-bid auctions
Decision Support Systems
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We analyze a revenue management problem in which a seller facing a Poisson arrival stream of consumers operates an online multiunit auction. Consumers can get the product from an alternative list price channel. We consider two variants of this problem: In the first variant, the list price is an external channel run by another firm. In the second one, the seller manages both the auction and the list price channels. Each consumer, trying to maximize his own surplus, must decide either to buy at the posted price and get the item at no risk, or to join the auction and wait until its end, when the winners are revealed and the auction price is disclosed. Our approach consists of two parts. First, we study structural properties of the problem, and show that the equilibrium strategy for both versions of this game is of the threshold type, meaning that a consumer will join the auction only if his arrival time is above a function of his own valuation. This consumer's strategy can be computed using an iterative algorithm in a function space, provably convergent under some conditions. Unfortunately, this procedure is computationally intensive. Second, and to overcome this limitation, we formulate an asymptotic version of the problem, in which the demand rate and the initial number of units grow proportionally large. We obtain a simple closed-form expression for the equilibrium strategy in this regime, which is then used as an approximate solution to the original problem. Numerical computations show that this heuristic is very accurate. The asymptotic solution culminates in simple and precise recipes of how bidders should behave, as well as how the seller should structure the auction, and price the product in the dual-channel case.