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Sellers Competing for Buyers in Online Markets

Sellers Competing for Buyers in Online Markets
Sellers Competing for Buyers in Online Markets
We consider competition between sellers offering similar items in concurrent online auctions, 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 there exists a pure Nash equilibrium in the case of two sellers with asymmetric 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., pretending to be a buyer in order to bid in its own auction). But, using an evolutionary simulation, we show that this shill bidding introduces inefficiences within the market. However, we then go on to show that these inefficiences can be reduced when the mediating auction institution uses appropriate auction fees that deter sellers from submitting shill bids.
164-170
Springer Verlag
Gerding, Enrico H.
d9e92ee5-1a8c-4467-a689-8363e7743362
Rogers, Alex
f9130bc6-da32-474e-9fab-6c6cb8077fdc
Dash, Rajdeep
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Jennings, N. R.
ab3d94cc-247c-4545-9d1e-65873d6cdb30
Gimpel, Henner
Jennings, N. R.
Kersten, Gregory E.
Ockenfels, Axel
Weinhardt, Christof
Gerding, Enrico H.
d9e92ee5-1a8c-4467-a689-8363e7743362
Rogers, Alex
f9130bc6-da32-474e-9fab-6c6cb8077fdc
Dash, Rajdeep
6c83d6ec-5b7d-4fd9-ab62-0394a8181ff4
Jennings, N. R.
ab3d94cc-247c-4545-9d1e-65873d6cdb30
Gimpel, Henner
Jennings, N. R.
Kersten, Gregory E.
Ockenfels, Axel
Weinhardt, Christof

Gerding, Enrico H., Rogers, Alex, Dash, Rajdeep and Jennings, N. R. (2008) Sellers Competing for Buyers in Online Markets. In, Gimpel, Henner, Jennings, N. R., Kersten, Gregory E., Ockenfels, Axel and Weinhardt, Christof (eds.) Negotiation, Auctions, and Market Engineering. Springer Verlag, pp. 164-170.

Record type: Book Section

Abstract

We consider competition between sellers offering similar items in concurrent online auctions, 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 there exists a pure Nash equilibrium in the case of two sellers with asymmetric 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., pretending to be a buyer in order to bid in its own auction). But, using an evolutionary simulation, we show that this shill bidding introduces inefficiences within the market. However, we then go on to show that these inefficiences can be reduced when the mediating auction institution uses appropriate auction fees that deter sellers from submitting shill bids.

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Published date: January 2008
Organisations: Agents, Interactions & Complexity

Identifiers

Local EPrints ID: 265134
URI: https://eprints.soton.ac.uk/id/eprint/265134
PURE UUID: 6cf4e2e7-7a96-4e7a-b8ca-ee505576f258
ORCID for Enrico H. Gerding: ORCID iD orcid.org/0000-0001-7200-552X

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Date deposited: 04 Feb 2008 11:17
Last modified: 07 Jun 2019 00:34

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Contributors

Author: Enrico H. Gerding ORCID iD
Author: Alex Rogers
Author: Rajdeep Dash
Author: N. R. Jennings
Editor: Henner Gimpel
Editor: N. R. Jennings
Editor: Gregory E. Kersten
Editor: Axel Ockenfels
Editor: Christof Weinhardt

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