| dc.description.abstract | This study examines the impact of different listing strategies in online auctions on sellers′ expected profits. The listing strategies include three formats: fixed price, second-highest price auction (referred to as ‘‘regular auction’’), and Buy-It-Now auction (referred to as ‘‘BIN auction’’). In a regular auction, only a reserve price needs to be set; for a fixed price listing, only a Buy-It-Now price is required, whereas the BIN auction requires both a reserve price and a Buy It Now price.
Although online auctions also use bidding mechanisms to determine prices, they differ significantly from traditional auctions. The most notable difference is that the duration of online auctions is usually much longer than traditional ones. To address this issue, eBay has developed several unique features for online auctions. One is the Proxy bid system, where bidders only need to enter the maximum price they are willing to pay, and eBay will automatically place bids on their behalf, effectively turning eBay auctions into second-highest price auctions. Another important innovation is the ‘‘Buy-It-Now’’ option, which allows sellers to sell at an acceptable price earlier, benefiting those with time-sensitive needs, while buyers get the opportunity to purchase immediately.
This paper uses a theoretical model to demonstrate that as sellers become more patient, the price of the ‘‘Buy-It-Now’’ option will gradually increase. For fully patient sellers, the effects of regular auctions and BIN auctions are equivalent. This further indicates that the greater the discounting, the more sellers tend to use the ‘‘Buy-It-Now’’ option to expedite transactions, thereby mitigating the loss of income due to discounting and effectively enhancing the expected discounted profit. | en_US |