Affordable Access

Pay-to-Bid Auctions



We analyze a new auction format in which bidders pay a fee each time they increase the auction price. Bidding fees are the primary source of revenue for the seller, but produce the same expected revenue as standard auctions. Our model predicts a particular distribution of ending prices, which we test against observed auction data. Our model fits the data well for over three-fourths of routinely auctioned items. The notable exceptions are video game paraphernalia, which show more aggressive bidding and higher expected revenue. By incorporating mild risk-loving preferences in the model, we explain nearly all of the auctions.

There are no comments yet on this publication. Be the first to share your thoughts.


Seen <100 times

More articles like this

Pay-to-bid auctions: To bid or not to bid

on Operations Research Letters

Multi-Unit Pay-Your-Bid Auctions with Variable Awa...

on Games and Economic Behavior Jan 01, 1998

All-pay auctions with pre- and post-bidding option...

on European Journal of Operationa... Dec 01, 2014
More articles like this..