Risk-taking bidders dominate pay-to-bid auctions, driving seller revenue up.
Pay-to-bid auctions are a type of auction where participants pay to place bids and the last bidder wins the item at a low price. A study analyzed data from a Czech auction site and found that bidders tend to take risks. The researchers used econometric models to understand bidding behavior and seller revenue. The findings support the idea that bidders in these auctions are willing to take risks to win items at a lower price.