When snipers become predators: Can mechanism design save online auctions?

Research output: Contribution to journalArticlepeer-review

37 Scopus citations

Abstract

The mechanics of current bidding technology on eBay and the role of mechanism design choices in online auctions are discussed. Bidding is conducted through the use of a proxy bidding agent on eBay. eBay's bidding core is developed to bring about the effect of a second price auction, allocating the goods to the highest bidder at a bid increment above the second-highest bid. eBay's proxy bidding agent prevents the bidder to specify the time she wants to put her bid. One of the main objectives of good mechanism design to avoid predatory and collusive behavior, and eBay has long been known to deal with opportunistic behavior from both the buyer and the sellers. A mechanism design approach can play a big role in minimizing the risks of the participating agents in electronic marketplaces. Everyone will benefit if the online auctioneers offer a full portfolio of auction design choices.

Original languageEnglish (US)
Pages (from-to)152-158
Number of pages7
JournalCommunications of the ACM
Volume46
Issue number12
DOIs
StatePublished - Dec 2003

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