Abstract
The dynamics of customer relationship are being reshaped by price-setting processes such as online auctions. This paper analyzes price setting process in business-to-consumer (B2C) online auctions. Typically, these auctions involve multiple identical units and utilize a variant of the traditional English-auction mechanism. We describe an online laboratory experiment that compares the efficiency of such a mechanism with a multi-item version of Vickrey's [Journal of Finance 41 (1961) 8.] second-price auction with respect to both seller's revenue and allocative efficiency. Our results reject the revenue equivalence principle and indicate that English auctions may dominate the Vickrey auctions. However, we observe that the allocative efficiency of Vickrey auctions is higher than the English auctions.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 135-153 |
| Number of pages | 19 |
| Journal | Decision Support Systems |
| Volume | 32 |
| Issue number | 2 |
| DOIs | |
| State | Published - Dec 2001 |
Keywords
- CRM
- Electronic commerce
- Laboratory experimentation
- Online auctions
ASJC Scopus subject areas
- Management Information Systems
- Information Systems
- Developmental and Educational Psychology
- Arts and Humanities (miscellaneous)
- Information Systems and Management