Econ 483_Lecture 6_Prizes_Contests

lecture 6 prizes contests econ483 econ of innovation

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Unformatted text preview: P rizes Contests Ebay Technical foundations of internet C2C commerce Market design (e.g. auctions) Payment systems E-market operations "eBay is a Venue": "We are not involved in the actual transaction between buyers & sellers. As a result, we have no control over the quality or legality of the items advertised..." Lecture 6: Prizes & contests, Econ483: Econ of Innovation & Technology, Evangelia Chalioti c A ll rights reserved. P rizes Contests Ebay Auction types Auction types: Ascending (English) auctions Descending (Dutch) auctions Second-price, sealed bid (Vickrey) - Highest bidder gets the item - The winner pays the second-highest bid price Lecture 6: Prizes & contests, Econ483: Econ of Innovation & Technology, Evangelia Chalioti c A ll rights reserved. P rizes Contests Ebay Auction design in C2C commerce eBay ascending-bid auctions include: starting price ending time bid increment "proxy bidding agents" Technically, it is equivalent to second-price (Vickrey) auction. Lecture 6: Prizes & contests, Econ483: Econ of Innovation & Technology, Evangelia Chalioti c A ll rights reserved. P rizes Lecture 6: Prizes & contests, Contests Econ483: Econ of Innovation & Technology, Ebay Evangelia Chalioti c A ll rights reserved. P rizes Contests Ebay Auction design in C2C commerce Why auctions? Hard for typical C2C seller to do market research & set optimal …xed price. Auctions allow sellers to increase revenues. Truth-telling is a dominant strategy Sellers can choose the type of the auction that they would like to use. Lecture 6: Prizes & contests, Econ483: Econ of Innovation & Technology, Evangelia Chalioti c A ll rights reserved. P rizes Contests Ebay Required readings Scotchmer, S., Innovation and Incentives. Sections: 2.2 - 2.4, 2.5 (commitment to pay, Vickrey auction) Lecture 6: Prizes & contests, Econ483: Econ of Innovation & Technology, Evangelia Chalioti c A ll rights reserved....
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