Sellers Competing for Buyers in Online Markets: Reserve Prices, Shill Bids, and Auction Fees


Gerding, Enrico H., Rogers, Alex, Dash, Rajdeep K. and Jennings, N. R. (2007) Sellers Competing for Buyers in Online Markets: Reserve Prices, Shill Bids, and Auction Fees. In, Twentieth International Joint Conference on Artificial Intelligence (IJCAI-07), Hyderabad, India, 06 - 12 Jan 2007. , 1287-1293.

This is the latest version of this item.

Download

[img] PDF
Download (318Kb)

Description/Abstract

We consider competition between sellers offering similar items in concurrent online auctions through a mediating auction institution, where each seller must set its individual auction parameters (such as the reserve price) in such a way as to attract buyers. We show that in the case of two sellers with asymmetric production costs, there exists a pure Nash equilibrium in which both sellers set reserve prices above their production costs. In addition, we show that, rather than setting a reserve price, a seller can further improve its utility by shill bidding (i.e., bidding as a buyer in its own auction). This shill bidding is undesirable as it introduces inefficiencies within the market. However, through the use of an evolutionary simulation, we extend the analytical results beyond the two seller case, and we then show that these inefficiencies can be effectively reduced when the mediating auction institution uses auction fees based on the difference between the auction closing and reserve prices.

Item Type: Conference or Workshop Item (Paper)
Additional Information: Event Dates: January 6-12, 2007
Keywords: Auctions, Shill Bidding, Auction Fees, Evolutionary Algorithms
Divisions: Faculty of Physical Sciences and Engineering > Electronics and Computer Science > Agents, Interactions & Complexity
ePrint ID: 263493
Date Deposited: 19 Feb 2007
Last Modified: 27 Mar 2014 20:07
Further Information:Google Scholar
ISI Citation Count:2
URI: http://eprints.soton.ac.uk/id/eprint/263493

Available Versions of this Item

  • Sellers Competing for Buyers in Online Markets: Reserve Prices, Shill Bids, and Auction Fees. (deposited 19 Feb 2007) [Currently Displayed]

Actions (login required)

View Item View Item

Downloads from ePrints over the past year. Other digital versions may also be available to download e.g. from the publisher's website.

View more statistics