The Baseline Stage consisted of a block of 10 auctions in which no buy prices (NO) were offered.
As we did not have information on risk preferences prior to the auctions, no attempt was made to calculate optimal buy prices.
12) These results show that in most cases average revenue is higher with buy prices than without, the exception being NOPROXY auctions with a temporary buy price.
Results are reported in the top row for all buy prices combined (360 observations per treatment), and in the other three rows, for buy prices of 25, 50, and 75 individually (120 observations each for PERM and TEMP).
In considering how often buy prices are utilized by the bidders, there are three related questions: (1) does buy price utilization vary between buy price types, (2) does buy price utilization vary across institutions, and (3) how does buy price utilization vary with buy price level?
First, buy prices are used more frequently as the number of BPE bidders increases in every case except for TEMP/NOPROXY with a buy price of 25.
It is clear in the figure that there is more early bidding in auctions with buy prices, regardless of the type, than those without (note the greater number and taller bars to the left).
In addition to the early bidding evident in auctions with a buy price, there is also a large amount of late bidding that occurs in all auctions, even those without buy prices.
Both the additional early bidding and improved efficiency that may accompany the use of a buy price may be important motivating factors for the introduction of buy prices in online auctions.
First, the introduction of a buy price may be an attempt to increase seller revenue as revenue is higher in auctions with buy prices than in auctions without.