Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/167971
Authors: 
Peeters, Ronald
Strobel, Martin
Vermeulen, Dries
Walzl, Markus
Year of Publication: 
2016
Citation: 
[Journal:] Games [ISSN:] 2073-4336 [Volume:] 7 [Year:] 2016 [Issue:] 1 [Pages:] 1-19
Abstract: 
With a laboratory experiment, we study the impact of buy-options and the corresponding buy-price on revenues and bidding behavior in (online) proxy-auctions with independent private valuations. We show that temporary buy-options may reduce revenues for two reasons: At low buy-prices, the application of the buy-option avoids revenue-enhancing bidding; at high buy-prices, bidders are reluctant to bid above the option price (even though the option is no longer available once an auction has started). The latter suggests a particular type of anchoring, where bidders use the buy-price to update their expectations about the strengths of their opponents.
Subjects: 
buy-options
online auctions
experiments
anchoring
JEL: 
C72
C91
D44
D82
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by/4.0/
Document Type: 
Article
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