Proxy Bidding Research Articles

Online Auction App

The online auction app described represents a sophisticated yet accessible platform, leveraging the robust capabilities of Firebase Real time Database and Firebase Storage. Its user- centric design fosters seamless interaction, enabling effortless login and signup processes for users eager to explore a treasure trove of valuable and rare products. Through a meticulously organized interface, users can not only peruse listings but also contribute their own prized possessions to the auction ecosystem, creating a dynamic marketplace of coveted items. The product description pages offer comprehensive insights accompanied by vivid imagery, empowering users to make informed decisions with confidence. Real-time bidding capabilities ensure an exhilarating experience, with automatic increments through proxy bidding ensuring fairness and efficiency. Moreover, the incorporation of secure payment gateways instills trust and reliability, enhancing the overall transactional experience. With a commitment to user satisfaction evident in its ad-free and free-of-charge model, this app stands as a testament to the seamless convergence of cutting- edge technology and user-centric design principles in the realm of online auctions. Keywords: Online auction app, Firebase Real time Database, Firebase Storage, User-friendly, Valuable and rare products, Login and signup, Product description, Bidding, Real-time updates, Proxy bidding, Secure payment gateways, User satisfaction, No ads, Free-of-charge, Seamless customization, Detailed information, Images, Categorization, Tags, Trustworthy transactional experience

Expectations-Based Loss Aversion in Auctions with Interdependent Values: Extensive vs. Intensive Risk

We analyze the bidding behavior of expectations-based loss-averse bidders in auctions with interdependent values. We emphasize the difference between the risk bidders face over whether they win the auction (extensive risk) and the risk they face over the value of the prize conditional on winning (intensive risk). The extensive risk creates an “attachment” effect, whereas the intensive risk operates via a “comparison” effect. How loss-averse bidders react to these different risks depends on whether they incorporate their bid into their reference point. Under “unacclimating personal equilibrium” (UPE), where bidders keep their expectations fixed when choosing their bids, both the extensive and intensive risks induce them to bid more aggressively. Moreover, bidders are exposed to the “winner’s curse” and a seller can attain higher revenue by hiding information in order to leverage the intensive risk. By contrast, under “choice-acclimating personal equilibrium” (CPE), where a bid determines both the reference lottery and the outcome lottery, the intensive risk creates a “precautionary bidding” effect that pushes bidders to behave less aggressively; whether this effect is reinforced or undermined by the extensive risk depends on a bidder’s likelihood of winning the auction. Furthermore, bidders are less aggressive than under UPE and can be subject to a “loser’s curse.” Yet, by committing to bidding less aggressively, such as by engaging in proxy bidding, loss-averse bidders are better off under CPE than UPE. This paper was accepted by Ilia Tsetlin, decision analysis.

Multichannel Auction Strategies in Online Advertising With a Profit Model

In the online advertising market that has increasingly emerged with the Internet's rapid development, supply side platforms (SSP) use multichannel auctions to sell demand side platform (DSP) advertisements. To explore which channel is dominant, we analyze three channels including direct bidding, bidding with costly information and proxy bidding. We develop an analytical model for studying the SSP's channel decisions and expected profit that will be generated in the context of such multichannel auctions. First, we construct the SSP profit models for these different channels. Then, comparing the profits, we analyze the formulation of strategies for these different situations. Importantly, for the three channels, we study how the probability that bidders will attach a higher value to advertisements influences the multichannel strategy of the SSP. The results show the following: (1) each channel has a market share; (2) it is better for SSPs to use the costly bidding channel if the probability that the bidders are higher value bidders is low or very high; and (3) the SSPs should consider the use of proxy bidding when the reserve price is high and the probability of having higher value bidders is not high.

Active bidders versus smart bidders

PurposeThe purpose of this paper is to contrast two lay theories of how consumers draw affective inferences about their online bidding experiences. The active-bidder theory (smart-bidder theory) predicts that after winning a bid, highly (minimally) participative bidders would be more satisfied than minimally (highly) participative bidders.Design/methodology/approachFour experiments test two competing hypotheses, the active-bidder hypothesis and the smart-bidder hypothesis (Study 1), identify a condition that mitigates the observed effects (Study 2), identify when the mitigation is effective or ineffective (Study 3) and replicate the findings in a scenario-based study where participants are allowed to make actual bidding decisions (Studies 4A and 4B).FindingsThe findings support the smart-bidder hypothesis across three different product categories; however, this heuristic-driven effect is absent when bidders have concrete shopping goals. The effect was sufficiently robust to be observed even when the bids are made at will.Research limitations/implicationsThe present research does not incorporate the widely adopted procedure of second-price auction (also known as proxy bidding in the eBay setting), a system that allows the highest bidder to win the auction but pay the amount of the second-highest bid.Practical implicationsOnline consumers should be mindful that entering the minimum number of bids not only helps consumers avoid overbidding but also elevates their joy in winning after the auction ends.Originality/valuePrior research on bidding behavior on online auction sites has yet to examine how different bidding dynamics affect consumers’ post-auction satisfaction. This research sheds light on the psychological process underlying the robust phenomenon: online auction consumers rely heavily on proxy signals. Bidders appear to use the efficiency heuristic in constructing their affective judgments of their buying experiences.

The Utilitarian Decision Making from Islamic Perspectives: Review and Settlement Attempt

Utilitarian decision making is a far-famed mechanism that alleged to model humans decisions with the help of certain functions known as utility functions. Utilities metaphorically evaluate alternatives and approximate the satisfaction afforded by each. The utilitarian model is considered the fundamental basis of several artificial intelligence techniques such as game theory, evolutionary, heuristic, and fuzzy based approaches. It has been immensely utilized to develop various intelligent systems such as Decision Support Systems (DSS), Negotiation Support Systems (NSS), Multi Agent Systems (MAS), Shopbots, and proxy bidding systems. Well known that the utilitarian model has been developed based on the hypothesis of rationality and maximization which embodied some secular norms. Islam in the other hand has been derived from diverse set of provisions in which highly upholds tender values and pays significance to moral issues. As a consequence, this paper conducts a brief comparison and deduced two commons bases and four discrepancies. In the time Islam accepts utilitarian conception and do not mind the acquisitive behaves which considered essential in life success but satirically criticizes egoistic encouragement, non-satiation, and un-prioritized preferences. The Islamic objections on the utilitarian decision not necessarily meant the solid inapplicability but a reasonable treatment out to take place in order to be Islamic legitimated. Introducing the altruistic utility supposedly drops the egoistic objection and then a satiated lexicographic utility hoped to cancel the rest of contradictions. The adoption of those treatments ought to assist in developing intelligent systems that rely on Islamic legitimated decision method which upholds the Islamic moral injunctions. It is hoped that this research will provide the impetus for researchers to propose systems that rely on Islamic legitimate decision making.

Design of Pairing-Based Proxy Signcryption System Model for Online Proxy Auctions

In recent years, the online auction of consumers’ goods is an increasingly popular selling channel. To copy with this tendency, the bidders’ convenience and security have to be considered. Some online auctions (such as eBay or Amazon) introduced a proxy bidding strategy that the bidder can decide a maximum bid and delegate his authority to a legal agent to automatically outbid other competitors for the last winner. In this paper, we identify some practical issues in the current bidding strategies and propose a system model of a pairing-based proxy signcryption which includes two cryptographic schemes; further, we apply the proposed schemes to the online proxy auction system for comparing two authorized online proxy auction policies (agents anonymity setting and agents accountability setting) with different applications of short message and long message. Also, we discuss some critical security issues under the online proxy auctions. DOI: http://dx.doi.org/10.5755/j01.itc.43.4.6348

A LABORATORY STUDY OF AUCTIONS WITH A BUY PRICE

We present a series of laboratory experiments that examine auctions with buy prices, which are prices that allow a bidder to stop the auction and buy the item immediately. Two types of buy prices are considered, one that is available throughout the auction and one that disappears with an initial bid. Both are evaluated with and without proxy bidding. We find that the use of a buy price increases revenue, early bidding, and auction efficiency. Differences between outcomes in auctions with permanent and temporary buy prices are consistent with the observed choices in auction design made by online auction sites. (JEL C90, D44, C70, L81)

Design of online auctions: Proxy versus non-proxy settings

Recent years have witnessed the rapid development of online auctions. Currently, some online auctions, such as eBay, introduce a proxy bidding policy, under which bidders submit their maximum bids and delegate to a proxy agent to automatically outbid other competitors for the top bidder, whereas other online auctions do not. This paper compares these two widely used auction mechanisms (proxy setting and non-proxy setting) and characterizes the equilibrium bidding behavior and the seller's expected revenue. We find the proxy auction outperforms the non-proxy auction in terms of the seller's expected revenue. This dominance result is not prone to the specific bid announcement policy, the bidder's knowledge regarding the number of bidders, the impact of traffic congestion along the bidding process, the number of items sold through the auction, and the existence of a reserve price. We further find that the proxy setting usually fails to sustain the truthful bidding as a dominant strategy equilibrium even if no minimum bid increments are adopted, and the possibility of a low-valuation-bidder dilemma where the low-valuation bidders could be better off if all bidders collude to bid at the last minute. We also discuss the dramatically different equilibrium bidding behaviors under the two auction mechanisms.

The Sealed-Bid Abstraction in Online Auctions

This paper presents five empirical tests of the popular modeling abstraction that assumes bids from online auctions with proxy bidding can be analyzed “as if” they were bids from a second-price sealed-bid auction. The tests rely on observations of the magnitudes and timings of the top two proxy bids, with the different tests stemming from different regularity assumptions about the underlying distribution of valuation signals. We apply the tests to data from three eBay markets—MP3 players, DVDs, and used cars—and we reject the sealed-bid abstraction in all three data sets. A closer examination of these rejections suggests that they are driven by less experienced bidders. This consistent rejection casts doubt on several existing theories of online auction behavior and suggests some demand estimates based on the abstraction can be biased. To assess the direction and magnitude of this bias, we propose and estimate a new model in which some bidders conform to the abstraction while other bidders bid in a reactive fashion. Because reactive bidding can be at least partially detected from the data, we are able to estimate the underlying distribution of demand and compare it to what the sealed-bid abstraction implies. We find that our proposed model fits the data better, and our demand estimates reveal a large potential downward bias were we to assume the second-price sealed-bid model instead.

The Sealed-Bid Abstraction in Online Auctions

This paper presents five empirical tests of the popular modeling abstraction that assumes bids from online auctions with proxy bidding can be analyzed “as if” they were bids from a second price sealed-bid auction. The tests rely on observations of the magnitudes and timings of the top two proxy bids, with the different tests stemming from different regularity assumptions about the underlying distribution of valuation signals. We apply the tests to data from three eBay markets - MP3 players, DVDs, and used cars - and we reject the sealed-bid abstraction in all three datasets. A closer examination of these rejections suggests they are driven by less experienced bidders. This consistent rejection casts doubt on several existing theories of online auction behavior and suggests some demand estimates based on the abstraction can be biased. To assess the direction and magnitude of this bias, we propose and estimate a new model in which some bidders conform to the abstraction while other bidders bid in a reactive fashion. Since reactive bidding can be at least partially detected from the data, we are able to estimate the underlying distribution of demand and compare it to what the sealed-bid abstraction implies. We find that our proposed model fits the data better, and our demand estimates reveal a large potential downward bias were we to assume the second-price sealed-bid model instead.

A mobile auction service based on mobile agents: design and analysis

With the advent of wireless networking and mobile computing technologies, there has been considerable interest in developing various mobile commerce services such as mobile auctions. This paper presents a mobile auction service based on mobile agents. Using a proxy server, users can generate a mobile agent by providing bidding information through a mobile terminal. The agent then moves to the required server to bid according to the user requirements. We have developed a prototype to demonstrate and evaluate the basic functions in a wireless network. Furthermore, we have formulated a mathematical model to analyse the commonly used 'proxy bidding method' for the mobile auction system. Based on the distribution of the maximum bidding price, the model can be used to find the probability of stopping at a certain price and, hence, the average winning price. Simulation and analytical results are presented to demonstrate the behaviour of the system.

The effects of proxy bidding and minimum bid increments within eBay auctions

We present a mathematical model of the eBay auction protocol and perform a detailed analysis of the effects that the eBay proxy bidding system and the minimum bid increment have on the auction properties. We first consider the revenue of the auction, and we show analytically that when two bidders with independent private valuations use the eBay proxy bidding system there exists an optimal value for the minimum bid increment at which the auctioneer's revenue is maximized. We then consider the sequential way in which bids are placed within the auction, and we show analytically that independent of assumptions regarding the bidders' valuation distribution or bidding strategy the number of visible bids placed is related to the logarithm of the number of potential bidders. Thus, in many cases, it is only a minority of the potential bidders that are able to submit bids and are visible in the auction bid history (despite the fact that the other hidden bidders are still effectively competing for the item). Furthermore, we show through simulation that the minimum bid increment also introduces an inefficiency to the auction, whereby a bidder who enters the auction late may find that its valuation is insufficient to allow them to advance the current bid by the minimum bid increment despite them actually having the highest valuation for the item. Finally, we use these results to consider appropriate strategies for bidders within real world eBay auctions. We show that while last-minute bidding (sniping) is an effective strategy against bidders engaging in incremental bidding (and against those with common values), in general, delaying bidding is disadvantageous even if delayed bids are sure to be received before the auction closes. Thus, when several bidders submit last-minute bids, we show that rather than seeking to bid as late as possible, a bidder should try to be the first sniper to bid (i.e., it should “snipe before the snipers”).

Computing price trajectories in combinatorial auctions with proxy bidding

Proxy bidding has proven useful in a variety of real auction formats – most notably eBay – and has been proposed for the nascent field of combinatorial auctions. Previous work on proxy bidding in combinatorial auctions requires the auctioneer to run the auction with myopic bidders to determine the outcome. In this paper, we present a radically different approach that computes the bidders’ allocation of their attention across the bundles only at “inflection points”. Inflections are caused by the introduction of a new bundle into an agent’s demand set, a change in the set of currently competitive allocations, or the withdrawal of an agent from the set of active bidders. This approach has several advantages over alternatives, including that it computes exact solutions and is invariant to the magnitude of the bids.

E-Marketing Is Getting Ambitious: Digging Deeper and Reaching Higher by Refining Our Assumptions

E-Marketing Is Getting Ambitious:Digging Deeper and Reaching Higher by Refining Our Assumptions Ajit Kambil (bio), Marios Koufaris (bio), Arnold Kamis (bio), and Bruce D. Weinberg (bio) Online sellers have long been able to design a useful and aesthetically appealing Web site, collect detailed customer information, and develop electronic relationships with customers and suppliers. These practices are established, well tested and maturing, so electronic marketing is tackling larger problems these days. Researchers in e-marketing continue to: 1) ask big questions about what is possible, 2) test assumptions about e-marketing, and 3) develop new technologies, test them in conjunction with human behavior, and analyze them in sophisticated ways. E-marketing research is getting ambitious and it is refining many of its assumptions. This special issue presents some of the latest work in this area. One widely held assumption is that eBay has become the king of online consumer- to-consumer auctions simply because it was a first-mover, has an attractive interface, and is well executed. It has succeeded and has a loyal community, but a closer analysis may show that eBay also owes its success to other reasons. A different auctioneer having deeper insights may be able to implement an auction market, perhaps with a business-to- business focus or in other countries where eBay does not have a major presence, and dethrone (or preempt) the king. In the first paper of this special section, Roumen Vragov uses an institutional analysis approach and laboratory experiments to explain why eBay dominates Internet auctions. His analytic and experimental findings suggest that the English auction procedures implemented by eBay (and others), encourage implicit collusive behavior among buyers, which decreases winning prices and lowers overall market efficiency. Ebay has prevailed, however, due to lesser overall time-related opportunity costs for buyers and sellers, as well as proxy bidding and the buy-it-now feature, which thwart the buyer tactics of jump-bidding and sniping. Hence, eBay is not simply the first-mover and first auction community, but an auction designer that includes pro-buyer and pro-seller features, thus ensuring itself liquidity. A second assumption is that small firms adopt e-marketing techniques for the same reasons as large firms, or that they may simply imitate successful large firms whether it is prudent or not. A deeper analysis examining the motivations for small firms may reveal that they are still climbing the learning curve, that their adoption of e-commerce, including e-marketing, is different from that of large firms. Their needs follow their risk-aversiveness, and they may have yet to realize the gains that follow successful implementation of e-marketing [End Page 1] practices. In their paper, Nancy Levenburg and Simha Magal examine this question. They use Importance-Performance Analysis to evaluate e-business strategies among small firms. Their analysis of more than 500 small firms concludes that they are in the early stages of implementing e-business, considering Marketing activities more important than Communications (e.g., with employees, partners, suppliers), Profitability, or Research activities. They also find that most small firms have lower performance in Marketing relative to its importance, whereas the other three groups of activities enjoy higher performance relative to importance. While the results indicate that small firms are tackling their most important area, Marketing, where the need is greatest, they will ultimately recognize the importance of the other activities, and proceeding cautiously, improve in those areas. Another significant area of research in e-marketing is that of trust. While it is assumed to be fundamental, is trust simply earned by conducting business over a period of time and meeting or exceeding customer expectations? There are many models of trust, showing different antecedents and consequents (Gefen, Karahanna et al. 2003; Gefen and Straub 2003; Pavlou 2003; Suh and Han 2003; Koufaris and Hampton-Sosa 2004). But what are the subprocesses of trust? Can trust be subdivided into its constituent processes? Can we compare trust processes between human and virtual sales agents and then design virtual sales agents to be more trustworthy than a human sales agent? These are important questions, as any seller who can achieve trust in virtual sales agents will have a solid foundation...

Who Wins on eBay: An Analysis of Bidders and Their Bid Behaviours

Online auctioning is one of the more successful business innovations on the Web. The auction format at eBay, the leading online auctioneer, has some unique characteristics including a fixed closing time for the bids and the use of a proxy bidding system that that is capable of acting as a bidder's agent. These features, coupled with third party products such as sniping software, have introduced novel bidder behaviours that may not occur in more traditional auction formats. In an attempt to study these behaviours, we collected and analysed data from over 11,000 eBay auctions. This paper presents the results of the analyses including descriptive information about the auctions and the classification of bids and bidders based on bid timing, frequency and strategy employed. The different types of bidders and their success rates offer insights into the nature of bidder participation in eBay auctions. In addition, chi‐square analyses reveal significant differences among the bidding strategies with respect to auc...