Paper Number

1804

Paper Type

Complete

Abstract

The paper studies the impact of bidding overtime in online art auctions. We identify two contrasting overtime bidding mechanisms influencing the final winning price: the positive effect of valuation learning and the negative effect of attention cost. We define a theoretical auction model with bidding mechanisms that yield an optimum outcome through Monte Carlo simulation. By evaluating four bidding overtime durations at six Chinese art auction houses, we consistently observe a positive effect on final prices with longer overtime policies in all settings, from which we validate the bidding mechanisms and propose an optimal design of overtime duration at 3 minutes. The paper then discusses whether these effects apply to lower-value eBay auctions and physical auctions.

Comments

22-Digital

Share

COinS
Best Paper Nominee badge
Best Paper in Track Badge
 
Dec 15th, 12:00 AM

Optimal Bidding Overtime Strategy for Online Art Auctions: Evidence from Chinese Auction Houses

The paper studies the impact of bidding overtime in online art auctions. We identify two contrasting overtime bidding mechanisms influencing the final winning price: the positive effect of valuation learning and the negative effect of attention cost. We define a theoretical auction model with bidding mechanisms that yield an optimum outcome through Monte Carlo simulation. By evaluating four bidding overtime durations at six Chinese art auction houses, we consistently observe a positive effect on final prices with longer overtime policies in all settings, from which we validate the bidding mechanisms and propose an optimal design of overtime duration at 3 minutes. The paper then discusses whether these effects apply to lower-value eBay auctions and physical auctions.

When commenting on articles, please be friendly, welcoming, respectful and abide by the AIS eLibrary Discussion Thread Code of Conduct posted here.