DocumentCode :
3063917
Title :
Online Auctions: There Can Be Only One
Author :
Aggarwal, Charu C. ; Yu, Philip S.
Author_Institution :
T.J. Watson Res. Center, IBM, Hawthorne, NY, USA
fYear :
2009
fDate :
20-23 July 2009
Firstpage :
176
Lastpage :
181
Abstract :
In recent years, the proliferation of the world wide web has lead toan increase in the number of public auctions on the internet. One ofthe characteristics of online auctions is that a successfulimplementation requires a high volume of buyers and sellers at itswebsite. Consequently, auction sites which have a high volume oftraffic have an advantage over those in which the volume is limited.This results in even greater polarization of buyers and sellerstowards a particular site. This is often referred to as the``network effect´´ in a variety of web and telecommunicationapplications involving interactions among a large number ofentities. While this effect has qualitatively been known toincrease the value of the overall network, its effect has never beenmodeled or studied rigorously. In this paper, we construct a MarkovModel to analyze the network effect in the case of web auctions. Weshow that the network effect is very powerful for the case of webauctions and can result in a situation in which one auction canquickly overwhelm its competing sites. This results in a situationin which the natural stable equilibrium is that of a single onlineauction seller for a given product and geographical locality. Whilea single player structure is unlikely because of some approximationassumptions in the model, the trend seems to show the likelyexistence of single dominant player in the web auction space.
Keywords :
Internet; Markov processes; Web sites; electronic commerce; Internet; Markov model; Web auctions; Web site; World Wide Web; auction sites; network effect; online auction seller; online auctions; public auctions; Business; Economies of scale; Electronic commerce; Internet; Polarization; Search engines; Telecommunication traffic; USA Councils; Web sites; Network Effect; Online Auctions;
fLanguage :
English
Publisher :
ieee
Conference_Titel :
Commerce and Enterprise Computing, 2009. CEC '09. IEEE Conference on
Conference_Location :
Vienna
Print_ISBN :
978-0-7695-3755-9
Type :
conf
DOI :
10.1109/CEC.2009.12
Filename :
5210799
Link To Document :
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