Sellers Competing for Buyers in Online Markets

Authors Enrico H. Gerding, Alex Rogers, Rajdeep K. Dash, Nicholas R. Jennings

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Enrico H. Gerding
Alex Rogers
Rajdeep K. Dash
Nicholas R. Jennings

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Enrico H. Gerding, Alex Rogers, Rajdeep K. Dash, and Nicholas R. Jennings. Sellers Competing for Buyers in Online Markets. In Negotiation and Market Engineering. Dagstuhl Seminar Proceedings, Volume 6461, pp. 1-7, Schloss Dagstuhl – Leibniz-Zentrum für Informatik (2007)


We consider competition between sellers offering similar items in concurrent online auctions, where each seller must set its individual auction parameters (such as the reserve price) in such a way as to attract buyers. We show that there exists a pure Nash equilibrium in the case of two sellers with asymmetric production costs. In addition, we show that, rather than setting a reserve price, a seller can further improve its utility by shill bidding (i.e., pretending to be a buyer in order to bid in its own auction). But, using an evolutionary simulation, we show that this shill bidding introduces inefficiences within the market. However, we then go on to show that these inefficiences can be reduced when the mediating auction institution uses appropriate auction fees that deter sellers from submitting shill bids.
  • Auctions
  • Competing Sellers
  • Shill Bidding
  • Auction Fees
  • Reserve Price


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