Decision Sciences
4 years ago

Maximizing profits: Why posting prices before auctions is the key!

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RePEc: Research Papers in Economics
The Optimal Sequence of Prices and Auctions
Hanzhe Zhang

Paper Summary

The article shows that it is more profitable for sellers to first set a fixed price and then hold an auction, rather than starting with an auction. This is because auctions are more costly for sellers. This finding supports the use of the "buy-it-now" format on eBay.

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