Abstract

Online auctions represent a model for the way the Internet is shaping the new economy. In the absence of spatial, temporal and geographic constraints these mechanisms provide many benefits to both buyers and sellers. However, significant research is still needed in designing new and better mechanisms, as well as examining the efficacy of existing ones in the contexts of the markets they serve. Issues of mechanism design, secondary market creation, incentive compatibility, bid taker cheating, simultaneous substitutability, and associated research methodologies are discussed in this review paper. Interestingly, one finds a new and potentially insightful research methodology standard being adopted by IS researchers delving into the area of online auctions. This involves quasi-analytical modeling that is subsequently validated by empirical investigation using data collected by automated agents which track real-world web auctions.

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