Hungry minds:
Dynamic Pricing
Strategies for
Multi-Product Revenue
Management
Constantinos Maglaras
Joern Meissner
eBay's Happy Hour:
Non-Rational Herding
in Online Auctions
Uri Simonsohn
Dan Ariely
Bid Together, Buy
Together
Robert J. Kauffman
Bin Wang
Cyberspace Auctions
and Pricing Issues
Patrick Bajari
Ali Hortacsu
Applications of
Flexible Pricing in B2B
Electronic Commerce
M. Bichler, et al.
Case study:
eBay
Places to visit:
Auctionbytes
Internet Auction List
Previous topic:
 
Digital Automata |
No where perhaps is the impact of the web more evident than in the case of auctions. By now everyone has heard of eBay, the pioneer in person-to-person online trading. Founded in 1995 by Pierre Omidyar, the company now provides millions of auctions, and hundreds of thousands of new items every day from which bidders may choose.
In the future, auctions will have a profound effect on many aspects of business on the web, from product pricing to supplier contracting to inventory liquidation. Auctions use the market mechanism to solve a difficult business problem: pricing. Setting prices can be tricky, as product managers well know, especially when it comes to new product releases. Price the product too high and inventories mount; under price what the market is willing to pay and shortages occur and money is left on the table. Finding the right balance can take time, and indeed, one can continue to miss the mark as the market shifts and competition evolves. With an auction, there is no guess work: the market sets the price (above some minimum). Auction-based pricing is sometimes referred to as "dynamic" or "fluid" pricing, in contrast to set or static pricing mechanisms.
To appreciate the full potential of the auction, one must recognize the many possible permutations this model can assume -- especially on the web. The commonly used auctions are the open-cry (or English) auction, the sealed bid auction, and the Dutch auction. However, there are a number of dimensions that can be varied in an auction to yield subtle but important differences in the process and outcome.
|
Hear the podcast:
Audio | Transcript
Things to read:
Learning Objectives
__/ 07-27-2005 \__
What Consumers -- and
Retailers -- Should Know
about Dynamic Pricing
__/ 05-17-2005 \__
Pennies from eBay:
Determinants of Price
in
Online Auctions
David Reiley, et al.
__/ 08-05-2003 \__
Auctions and Pricing
in E-Marketplaces
Wedad Elmaghraby
__/ 11-11-2003 \__
Shattering the Myth of
Costless Price Changes:
Emerging Perspectives
on Dynamic Pricing
Mark Bergen, et al.
Next topic:
 
Channel Conflict |
