Good bids come to those who wait

the value of late bidding in online auctions

Bryan Lim, Joshua Shemesh

Research output: Contribution to journalArticleResearchpeer-review

Abstract

This paper proposes an intuitive rationale for late bidding in online venues. The expected surplus from bidding on subsequent auctions for equivalent items creates an option value to losing the current auction. This option is dynamic due to the stochastic arrival of new auctions and early bids on later-closing auctions. We demonstrate that late bidding can be optimal given the decentralised and heterogeneous nature of online auctions, in which the option value is exogenous to an individual bidder’s actions. Late bidding precludes the bidder from being locked into a suboptimal bid as her opportunity set evolves.

Original languageEnglish
Pages (from-to)248-261
Number of pages14
JournalEconomic Record
Volume95
Issue number309
DOIs
Publication statusPublished - Jun 2019

Cite this

@article{eba1803447494c36a5ebedddab5fd0fe,
title = "Good bids come to those who wait: the value of late bidding in online auctions",
abstract = "This paper proposes an intuitive rationale for late bidding in online venues. The expected surplus from bidding on subsequent auctions for equivalent items creates an option value to losing the current auction. This option is dynamic due to the stochastic arrival of new auctions and early bids on later-closing auctions. We demonstrate that late bidding can be optimal given the decentralised and heterogeneous nature of online auctions, in which the option value is exogenous to an individual bidder’s actions. Late bidding precludes the bidder from being locked into a suboptimal bid as her opportunity set evolves.",
author = "Bryan Lim and Joshua Shemesh",
year = "2019",
month = "6",
doi = "10.1111/1475-4932.12456",
language = "English",
volume = "95",
pages = "248--261",
journal = "Economic Record",
issn = "0013-0249",
publisher = "Wiley-Blackwell",
number = "309",

}

Good bids come to those who wait : the value of late bidding in online auctions. / Lim, Bryan; Shemesh, Joshua.

In: Economic Record, Vol. 95, No. 309, 06.2019, p. 248-261.

Research output: Contribution to journalArticleResearchpeer-review

TY - JOUR

T1 - Good bids come to those who wait

T2 - the value of late bidding in online auctions

AU - Lim, Bryan

AU - Shemesh, Joshua

PY - 2019/6

Y1 - 2019/6

N2 - This paper proposes an intuitive rationale for late bidding in online venues. The expected surplus from bidding on subsequent auctions for equivalent items creates an option value to losing the current auction. This option is dynamic due to the stochastic arrival of new auctions and early bids on later-closing auctions. We demonstrate that late bidding can be optimal given the decentralised and heterogeneous nature of online auctions, in which the option value is exogenous to an individual bidder’s actions. Late bidding precludes the bidder from being locked into a suboptimal bid as her opportunity set evolves.

AB - This paper proposes an intuitive rationale for late bidding in online venues. The expected surplus from bidding on subsequent auctions for equivalent items creates an option value to losing the current auction. This option is dynamic due to the stochastic arrival of new auctions and early bids on later-closing auctions. We demonstrate that late bidding can be optimal given the decentralised and heterogeneous nature of online auctions, in which the option value is exogenous to an individual bidder’s actions. Late bidding precludes the bidder from being locked into a suboptimal bid as her opportunity set evolves.

UR - http://www.scopus.com/inward/record.url?scp=85062724395&partnerID=8YFLogxK

U2 - 10.1111/1475-4932.12456

DO - 10.1111/1475-4932.12456

M3 - Article

VL - 95

SP - 248

EP - 261

JO - Economic Record

JF - Economic Record

SN - 0013-0249

IS - 309

ER -