Reverse procurement and auctions for consumers

Abstract

Internet auctions have become very important for B-2-C E-Commerce. With 56 million active users, eBay alone generates a 34 billion in turnover per annum [Ebay05, 2]. Typically, forward auctions with an ascending- bid mechanism are employed in B-2-C or C-2-C environments. Sellers initiate auctions and buyers compete for the products offered which causes prices to rise until the highest bid wins. With a similar auction design, eBay (holding over 80% market share of all online retail auctions) is "seller-oriented": It is the seller who initiates the process, and it is equally the seller who is then favoured by inexperienced buyers who often overbid and overpay their target items; a phenomenon called "the winner's curse".