TY - JOUR
T1 - Bidding process in online auctions and winning strategy
T2 - Rate equation approach
AU - Yang, I.
AU - Kahng, B.
PY - 2006
Y1 - 2006
N2 - Online auctions have expanded rapidly over the last decade and have become a fascinating new type of business or commercial transaction in this digital era. Here we introduce a master equation for the bidding process that takes place in online auctions. We find that the number of distinct bidders who bid k times up to the t th bidding progresses, called the k -frequent bidder, seems to scale as nk (t)∼t k-2.4. The successfully transmitted bidding rate by the k -frequent bidder is likely to scale as qk (t)∼ k-1.4, independent of t for large t. This theoretical prediction is close to empirical data. These results imply that bidding at the last moment is a rational and effective strategy to win in an eBay auction.
AB - Online auctions have expanded rapidly over the last decade and have become a fascinating new type of business or commercial transaction in this digital era. Here we introduce a master equation for the bidding process that takes place in online auctions. We find that the number of distinct bidders who bid k times up to the t th bidding progresses, called the k -frequent bidder, seems to scale as nk (t)∼t k-2.4. The successfully transmitted bidding rate by the k -frequent bidder is likely to scale as qk (t)∼ k-1.4, independent of t for large t. This theoretical prediction is close to empirical data. These results imply that bidding at the last moment is a rational and effective strategy to win in an eBay auction.
UR - http://www.scopus.com/inward/record.url?scp=33744934007&partnerID=8YFLogxK
U2 - 10.1103/PhysRevE.73.067101
DO - 10.1103/PhysRevE.73.067101
M3 - Article
AN - SCOPUS:33744934007
SN - 1539-3755
VL - 73
JO - Physical Review E - Statistical, Nonlinear, and Soft Matter Physics
JF - Physical Review E - Statistical, Nonlinear, and Soft Matter Physics
IS - 6
M1 - 067101
ER -