The Number of Active Bidders in Internet Auctions
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.
De Haan, L., de Vries, C., and Zhou, C. "The Number of Active Bidders in Internet Auctions." Journal of Economic Theory, 148(4), p. 1726–1736, 2013.
This article was originally published in Journal of Economic Theory, volume 148, issue 4, in 2013.
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