Abstract
The online auction market has been growing at a spectacular rate. Most auctions are open-bid auctions where all the participants know the current highest bid. This knowledge has led to a phenomenon known as sniping, whereby some bidders may wait until the last possible moment before bidding, thereby depriving other bidders of the opportunity to respond and also preventing sellers from obtaining the highest price for an item. This is especially true in the case of the commonly used second-price, fixed-deadline auction. We consider a procedure involving a randomly determined stopping time and show that this approach eliminates the potential benefits to a sniper. The scheme enables all bidders to compete more fairly and promotes an early bidding strategy, which is likely to increase the price received by the seller while providing adequate bidding opportunities for would-be buyers.
| Original language | English |
|---|---|
| Pages (from-to) | 1265-1272 |
| Number of pages | 8 |
| Journal | Journal of the Operational Research Society |
| Volume | 61 |
| Issue number | 8 |
| DOIs | |
| State | Published - 1 Aug 2010 |
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Keywords
- bidding
- electronic auctions
- probability
- random stopping times
- sniping
- uniform distribution
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A new end-of-auction model for curbing sniping. / Malaga, Ross; Porter, D.; Ord, K.; Montano, B.
In: Journal of the Operational Research Society, Vol. 61, No. 8, 01.08.2010, p. 1265-1272.Research output: Contribution to journal › Article
TY - JOUR
T1 - A new end-of-auction model for curbing sniping
AU - Malaga, Ross
AU - Porter, D.
AU - Ord, K.
AU - Montano, B.
PY - 2010/8/1
Y1 - 2010/8/1
N2 - The online auction market has been growing at a spectacular rate. Most auctions are open-bid auctions where all the participants know the current highest bid. This knowledge has led to a phenomenon known as sniping, whereby some bidders may wait until the last possible moment before bidding, thereby depriving other bidders of the opportunity to respond and also preventing sellers from obtaining the highest price for an item. This is especially true in the case of the commonly used second-price, fixed-deadline auction. We consider a procedure involving a randomly determined stopping time and show that this approach eliminates the potential benefits to a sniper. The scheme enables all bidders to compete more fairly and promotes an early bidding strategy, which is likely to increase the price received by the seller while providing adequate bidding opportunities for would-be buyers.
AB - The online auction market has been growing at a spectacular rate. Most auctions are open-bid auctions where all the participants know the current highest bid. This knowledge has led to a phenomenon known as sniping, whereby some bidders may wait until the last possible moment before bidding, thereby depriving other bidders of the opportunity to respond and also preventing sellers from obtaining the highest price for an item. This is especially true in the case of the commonly used second-price, fixed-deadline auction. We consider a procedure involving a randomly determined stopping time and show that this approach eliminates the potential benefits to a sniper. The scheme enables all bidders to compete more fairly and promotes an early bidding strategy, which is likely to increase the price received by the seller while providing adequate bidding opportunities for would-be buyers.
KW - bidding
KW - electronic auctions
KW - probability
KW - random stopping times
KW - sniping
KW - uniform distribution
UR - http://www.scopus.com/inward/record.url?scp=77954830582&partnerID=8YFLogxK
U2 - 10.1057/jors.2009.79
DO - 10.1057/jors.2009.79
M3 - Article
AN - SCOPUS:77954830582
VL - 61
SP - 1265
EP - 1272
JO - Journal of the Operational Research Society
JF - Journal of the Operational Research Society
SN - 0160-5682
IS - 8
ER -