Overview

New information technologies allow for the design of innovative electronic markets which can improve the efficiency of trading. In this context, several internet marketplaces have recently extended the flexibility of their selling mechanisms by creating hybrid institutions which combine an auction with a fixed price offer so that buyers can choose to bid in the auction or to acquire the item for the fixed price. Applying a Market Engineering approach, this book introduces a model of an auction with a posted price offer and investigates the characteristics of such mechanisms. It discusses the respective equilibrium strategies of both the sellers and the bidders which provide useful insights into understanding actual behavior. The theoretical results are compared with strategies of students in a controlled experiment. The experimental observations indicate shortcomings of standard economic theories and help to further improve electronic markets.

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9783540352655

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From the reviews: <p> The book contains a study of a model describing an auction with a posted price offer (APPO). The idea of the investigation comes from internet auctions. a ] The analysis presented in the book can be rated among the studies applying the so called market engineering approach. a ] The book is up to date and its subject is presented in an accessible way with many references to the real internet auctions. This should make the book interesting for a wide audience of readers. (Malgorzata Doman, Zentralblatt MATH, Vol. 1108 (10), 2007)

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