Seller's strategic pricing in auctions impacts revenue and buyer behavior.
The article explores how sellers can set the best prices in auctions by considering how buyers are influenced by past prices and their fear of losing out. The study shows that sellers should set higher prices in first-price auctions but will make more money in second-price auctions. If buyers are looking to gain rather than avoid loss, sellers should set lower prices in second-price auctions to make more money. This research helps sellers understand how to maximize their profits in different auction scenarios.