Production and Operations Management Vol. 18 No. 6 2009
Optimal Reserve Prices in Name‐Your‐Own‐Price Auctions with Bidding and Channel Options
Abstract
Few papers have explored the optimal reserve prices in the name‐your‐own‐price (NYOP) channel with bidding options in a multiple channel environment. In this paper, we investigate a double‐bid business model in which the consumers can bid twice in the NYOP channel, and compare it with the single‐bid case. We also study the impact of adding a retailer‐own list‐price channel on the optimal reserve prices. This paper focuses on achieving some basic understanding on the potential gain of adding a second bid option to a single‐bid system and on the potential benefits of adding a list‐price channel by the NYOP retailer. We show that a double‐bid scenario can outperform a single‐bid scenario in both single‐channel and dual‐channel situations. The optimal reserve price in the double‐bid scenario is no less than that in the single‐bid case. Furthermore, the addition of a retailer‐own list‐price channel could push up the reserve prices in both single‐bid and double‐bid scenarios.
- DOI
- 10.1111/j.1937-5956.2009.01045.x
- Volume
- 18
- Issue
- 6
- Pages
- 653-671
- Language
- en
- Sources
- crossref openalex