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This paper aims to investigate how competition among online auction sellers influences the setting of both open and secret reserve prices, thereby affecting auction outcome.

Using a data set collected from eBay consisting of 787 identical product auctions, three empirical models have been proposed. Model 1 simultaneously estimates the effects of auction competition on a seller’s own open and secret reserve price strategies; Model 2 estimates the effects of auction competition on bidder participation; and Model 3 estimates the direct and indirect effects of auction competition on selling price.

Competition among sellers is central to shaping sellers’ reserve price strategies. When there are more concurrent auctions for identical items, sellers tend to specify a low open reserve and are less likely to set a secret reserve. Sellers are strongly influenced by competitors’ reserve price strategies, and tend to follow competition. Finally, auction competition and competitive reserve price strategies influence both bidder entry and selling prices.

This study has important implications for both sellers and bidders. It highlights the importance for sellers to adapt their reserve price strategies in light of their competitors’ reserve price strategies and offers implications for bidders regarding auction selection. An auction with low starting bid does not necessarily lead to a lower selling price as it attracts more bidders.

This paper focuses on competition among auction sellers, whereas previous literature has focused on competition among bidders. This paper is the first to study the impact of competing reserve prices in auctions.

In public-private partnership (PPP) contracts of water utilities, of particular concern is lack of market competition. This paper focuses on the size of contracts. If governments design a large-scale transaction, economies of scale in service operation can be expected, but competition in auctions may be compromised. For small contracts many firms will apply, but at the cost of scale diseconomies in operation. The estimated cost function of PPP water utilities indicates that economies of scale exist but diminish quickly as production increases. There is no rationale for more than 300 million cubic meters of water service concessions under a single package, taking a risk of little competition. Conversely, less than 50 million cubic meters of concessions are too small; the bundling approach is required.

We show how institutional and procedural characteristics affect the final price in public procurement. In order to obtain comparable unit prices, our analysis examined public procurement of homogeneous goods only. We examined two Czech commodity markets: electricity and natural gas, which enabled us to use a private market price as a benchmark metric. The regression analysis is based on the standard ordinary least squares method. On a dataset of 277 tenders, we found that the final unit price of the procurement is sensitive to movements in both commodity market price and price estimated ex ante by the procurer. Moreover, we identified that the final price is reduced when the procurer uses an open procedure, an electronic auction, or attracts more competitors.

This paper attempts to provide an empirical cross‐industrial study on critical success factors impacting on “price” and “process” performance in business‐to‐business (B2B) e‐reverse auction design.

Based on an online survey to a panel of academic experts and practitioners, the paper presents the empirical validation of a previous conceptual model using a confirmatory factor analysis (CFA) approach.

Results demonstrate that a multi facet construct consisting of six main dimensions impacts on e‐auction performance. Moreover, these dimensions differently impact on price and process performance.

Because of the complexity of the framework, the sample size and the qualitative nature of experts' observations, results should be seen as more indicative than conclusive and therefore generalization should be additionally tested.

Findings provide useful information for the formulation of managerial decisions in designing the auction event/process and supporting the definition of different negotiation strategies.

This article is a first attempt to test a conceptual framework on critical factors impacting on e‐reverse auction performance in a B2B context. A lot of conceptual papers try to systematize the numerous variables affecting e‐auction success and their complex relationships into a single comprehensive framework; nevertheless there is a lack of empirical evidence supporting these models especially in the B2B context.

The purpose of this paper is to model group advertising decisions, which are the collective decisions of every single advertiser within the set of advertisers who are competing in the same auction or vertical industry, and examine resulting market outcomes, via a proposed simulation framework named Experimental Platform for Search Engine Advertising (EXP-SEA) supporting experimental studies of collective behaviors in the context of search engine advertising.

The authors implement the EXP-SEA to validate the proposed simulation framework, also conduct three experimental studies on the aggregate impact of electronic word-of-mouth (eWOM), the competition level and strategic bidding behaviors. EXP-SEA supports heterogeneous participants, various auction mechanisms and also ranking and pricing algorithms.

Findings from the three experiments show that both the market profit and advertising indexes such as number of impressions and number of clicks are larger when the eWOM effect is present, meaning social media certainly has some effect on search engine advertising outcomes, the competition level has a monotonic increasing effect on the market performance, thus search engines have an incentive to encourage both the eWOM among search users and competition among advertisers, and given the market-level effect of the percentage of advertisers employing a dynamic greedy bidding strategy, there is a cut-off point for strategic bidding behaviors.

This is one of the first research works to explore collective group decisions and resulting phenomena in the complex context of search engine advertising via developing and validating a simulation framework that supports assessments of various advertising strategies and estimations of the impact of mechanisms on the search market.

This paper examines the economic forces which may lead to government-assisted or -facilitated bid-rigging (kansei-dango) in public procurement in Japan, and considers their implications. A public official may often worry about situations where his/her procurement project will not be successfully implemented. Based on a simplified theoretical treatment and on case studies of kansei-dango, it is argued that the desire to avert the risk of unsuccessful procurement resulting from the "experience goods" status of procured goods and/or services may be one reason for bid-rigging. Based on this understanding of kansei-dango, we discuss some implications for policies to restrain this type of corruption.

This paper aims to present a positive analysis of the bidding process for private finance initiative (PFI) projects. The analysis attempts to unravel how value for money (VFM) changes in the bidding process and what factors influence this change. Bidding theory postulates that the winning bid price drops from the effect of competition when the number of bid-participating firms increases.

An instrumental variable analysis was conducted using a two-stage least-squares method to remove the influence of endogeneity in the number of bid participants, which, according to prior research and surveys of business operators, possibly explains some of the VFM change. The results were considered robust because no observable change was found in the positive effect of the number of participant firms.

This paper provides positive evidence of the relationship between the number of firms and the bidding result. The analysis shows that the number of bid-participating firms clearly has a significant positive effect on VFM change. Specifically, competition lowers the winning bid amount in line with the theoretical proposition.

This study confirms previous research based on bidding data of Japanese PFI projects, a segment not sufficiently researched so far. Further, increasing the number of participant firms, up to a maximum of six, is shown to raise the VFM, a result consistent with the fact that five major construction companies play a leading role in Japanese PFI projects.

Local public officials rely on tax and non-tax incentive packages to develop their economies. No conclusive evidence supports the economic improvement incentives afford. We investigate, with an experimental approach, the political reasons public officials use tax incentives. The experiment uses simulation gaming to model local economic development as an auction, in that way permitting us to compare the impact that motives, goals, and contexts have on outcomes. Our findings suggest that the majority of economic development competitors fall victim to the “winner’s curse”-overestimating and overbidding the potential payoff for business development.

This paper aims to empirically test the effect of list price and bidding strategies in ascending auctions of residential real estate.

Three regression models are estimated, using a unique data set from 629 condominium apartments in the inner-city of Stockholm, Sweden, sold between January 2010 and December 2011.

The results show that jump bidding has the predicted effect of reducing competition by scaring off bidders. However, a higher average bid increment leads to a higher selling price. Furthermore, results show that a fast auction in terms of average time between bids acts to increase the probability of so-called auction fever as both the number of bidders and the selling price are positively correlated with the speed of the auction. While the average behavior of all auction participants, in terms of jump bidding and time between bids, significantly affects auction outcomes, differences in strategies applied by winners and losers show mixed results. The results of this study with respect to sellers’ list price strategy show that underpricing is an ineffective strategy in terms of enticing more bidders to participate in the auction. Furthermore, underpricing is not sufficient to have a positive effect on the selling price.

This paper is one of the first papers to empirically analyze how different bidding strategies affect the outcome of residential real estate auctions in terms of competition and the final selling price.

The purpose of this paper is to assess the degree to which auctioning the right to provide universal service is a viable option in developed countries with high teledensity and near ubiquitous fixed line and mobile networks. The paper also aims to provide signposts on the types of issues regulators need to consider and resolve when designing auctioning mechanisms for the competitive provision of universal service.

The paper examines the nature and scope of universal service, the approaches that have been used to identify the costs of universal service provision and the difficulties in using an auction process to allocate the right to provide universal service in countries with near ubiquitous network infrastructure. Australia is used as a case study on the difficulties of using auctions to encourage new entry in universal service areas served by a powerful incumbent. The paper also examines the types of issues regulators need to resolve when designing auction mechanisms for universal service provision.

The paper concludes that for developed countries, it is unclear whether the use of auctions for the provision of universal service will have the desired effect of ensuring a market‐based approach to service provision. This is because the risks associated with becoming an alternative universal service provider are likely to outweigh the benefits of doing so. Further, the risks faced by an alternative universal service provider are not borne by the incumbent operator thus further increasing the disincentive to bid for the right to provide universal service. The paper also concludes that the practical design of the universal service rights and obligations which will be attached to a winning bidder's license conditions is an extremely important mechanism by which some of the risks to potential universal service providers can be overcome.

The paper stimulates thinking about whether universal service auctions are a viable means of providing universal service in developed countries. In presenting empirical evidence of the difficulties in using auctions to introduce competition in universal service provision, the paper may provide valuable input to the regulatory proceedings associated with introducing universal service contestability arrangements that are currently being conducted in various countries.