Title

The Number of Active Bidders in Internet Auctions

Document Type

Article

Publication Date

7-2013

Abstract

Internet auctions attract numerous agents, but only a few become active bidders. Under the Independent Private Values Paradigm the valuations of the active bidders form a specific record sequence. This record sequence implies that if the number n of potential bidders is large, the number of active bidders is approximately 2logn, potentially explaining the relative inactivity. Moreover, if the arrival of potential bidders forms a non-homogeneous Poisson process due to a time preference for auctions that are soon to close, then the arrival process of the active bidders is approximately a Poisson arrival process.

Comments

This article was originally published in Journal of Economic Theory, volume 148, issue 4, in 2013.

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Peer Reviewed

1

Copyright

Elsevier