Publication details

Pay-to-Bid Auctions: Evidence from Czech Data

Authors

KUNA Vojtěch KRČÁL Ondřej

Year of publication 2013
Type Article in Proceedings
Conference Proceedings of the 31st International Conference Mathematical Methods in Economics 2013
MU Faculty or unit

Faculty of Economics and Administration

Citation
Web https://is.muni.cz/auth/repo/1122740/Kuna_Krcal_2013.pdf
Field Economy
Keywords internet auctions; bidding; fees; risk-seeking preferences
Attached files
Description This paper examines properties of pay-to-bid auctions. Pay-to-bid auctions represent a relatively new type of all-pay auctions in which participants have to pay a fee in order to increase the purchase price by a small fixed bidding increment. The player who submits the last bid wins the right to buy the auctioned item at the current purchase price, which is normally substantially lower than the value of the item. While most of the existing studies examine the data on the international server Swoopo.com, we present a unique dataset retrieved from the Czech auction site Bonus.cz. In the paper, we introduce econometric models that explain the total number of bids and seller’s revenue using data from the period between July 2009 and April 2010 where the basic properties of the auctions correspond to the stylized facts found in the US data. We compare the results with predictions of the model of payto- bid auctions introduced by [3]. We find that the empirical evidence is consistent with theoretical predictions and suggests risk-seeking preferences of bidders.
Related projects:

You are running an old browser version. We recommend updating your browser to its latest version.

More info