Optimal seller strategy in overlapping auctions |
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| Institution: | 1. Brandon University, Brandon, Manitoba, R7A6A9, Canada;2. Department of Marketing, School of Business, University of Queensland, St Lucia, QLD, 4067, Australia;1. Department of Management, Marketing, and Logistics, Georgia College & State University, 231 W Hancock St., 215A Atkinson Hall, Milledgeville, GA, 31061, USA;2. Department of Retailing, University of South Carolina, 705 Close-Hipp, Columbia, SC, 29201, USA;1. Department of Management, Università Politecnica delle Marche, Piazzale Martelli Raffaele, 8, 60121, Ancona, Italy;2. Department of Information Engineering, Università Politecnica delle Marche, Via Brecce Bianche 12, 60131, Ancona, Italy;1. United Arab Emirates University, United Arab Emirates;2. United Arab Emirates University, P.O. Box 15551, Al-Ain, United Arab Emirates;3. Nottingham Business School, Nottingham Trent University, Nottingham, United Kingdom;4. University of Sadat City, Sadat City, Menofia, Egypt;5. Faculty of Tourism and Hotels, University of Sadat City, Egypt;6. College of Business Administration, Jazan University, Saudi Arabia;1. The David D. Reh School of Business, Clarkson University – Capital Region Campus, Schenectady, NY, 12308, 518-631-9888, USA;2. The David D. Reh School of Business, Clarkson University, Potsdam, NY, 13699, 315-268-2300, USA;1. School of Management, Jinan University, Guangzhou, Guangdong Province, 510632, China;2. Faculty of Business Administration, University of Macau, Macau, 999078, China;3. School of Management and Economics, Beijing Institute of Technology Beijing, 100084, China;1. Institute of Management Technology, Ghaziabad, India;2. Institute of Management Technology, Hyderabad, India |
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| Abstract: | Little research has been conducted on a common phenomenon in today's online environment: the concurrent selling of identical products in online auctions. To fill this gap, the current research proposes a game-theoretical model to analyze the seller's optimal strategy for selling two identical items in overlapping auctions. The overlap is modeled endogenously (as the seller's decision), trading off multiple influences including the positive effect on the overlap from bidders' forward-looking behavior and the seller's time discounting, versus the negative impact from bidders' learning and varied demand (i.e., bidder entry). The combined impact of these factors governs the conditions for which a simultaneous, sequential, or partially overlapping strategy is optimal. When the effect of bidders' forward-looking behavior and/or the seller's time discounting dominates, running simultaneous auctions is optimal; when bidders' learning (and bidder entry) dominates, running sequential auctions is optimal. Partially overlapping auctions are optimal when neither effect dominates and the opposing effects are offsetting. |
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| Keywords: | Game theory Retailing Overlapping auctions Learning Cross bidding Forward looking |
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