Dynamic Pricing

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Dynamic Pricing

  1. 1. Chapter 9 Dynamic Pricing: Auctions and More
  2. 2. Learning Objectives <ul><li>Define the various types of auctions and list their characteristics </li></ul><ul><li>Describe the process of conducting forward and reverse auctions </li></ul><ul><li>Describe the benefits and limitations of auctions </li></ul><ul><li>Describe the various services that support auctions </li></ul><ul><li>Describe the hazards of e-auction fraud and countermeasures </li></ul><ul><li>Describe bartering and negotiating </li></ul><ul><li>Analyze future directions and the role of m-commerce </li></ul>
  3. 3. Electronic Auctions in Action <ul><li>Illustrative examples: </li></ul><ul><ul><li>C2B reverse auctions: DM&S </li></ul></ul><ul><ul><li>B2C and C2C forward auctions: Dell Computers </li></ul></ul><ul><ul><li>C2C forward auctions: all of us at eBay </li></ul></ul>
  4. 4. Figure 9-1 A Dell Product in an Auction
  5. 5. Fundamentals of Dynamic Pricing and Auctions <ul><li>Fundamentals </li></ul><ul><ul><li>Traditional auctions </li></ul></ul><ul><ul><ul><li>Last only a few minutes (short decision making time) and sellers may not get highest price </li></ul></ul></ul><ul><ul><ul><li>Bidders may not get what they want </li></ul></ul></ul><ul><ul><li>Electronic auctions </li></ul></ul><ul><ul><ul><li>Like offline auctions, performed on PC </li></ul></ul></ul><ul><ul><ul><li>Host sites act like brokers </li></ul></ul></ul><ul><ul><ul><li>Buyers may solicit offers from potential sellers </li></ul></ul></ul>
  6. 6. Fundamentals <ul><li>Dynamic pricing refers to a commerce transaction in which prices are not fixed </li></ul><ul><ul><li>Forms of dynamic pricing: </li></ul></ul><ul><ul><ul><li>Negotiation </li></ul></ul></ul><ul><ul><ul><li>Bargaining </li></ul></ul></ul><ul><ul><li>Four major configurations depending upon how many buyers and sellers are involved: </li></ul></ul><ul><ul><ul><li>One buyer, one seller </li></ul></ul></ul><ul><ul><ul><li>One buyer, many potential buyers </li></ul></ul></ul><ul><ul><ul><li>One seller, one buyer </li></ul></ul></ul><ul><ul><ul><li>One seller, many potential buyers </li></ul></ul></ul>
  7. 7. Figure 9-2 Types of Dynamic Pricing
  8. 8. Fundamentals <ul><li>Dynamic pricing and auctions (cont.) </li></ul><ul><ul><li>English auctions (sequentially one item at a time) </li></ul></ul>Dynamic
  9. 9. Figure 9-3 English Auction, Ascending Price
  10. 10. Fundamentals (cont.) <ul><li>Dynamic pricing and auctions (cont.) </li></ul><ul><ul><li>Yankee auctions—multiple identical items with a minimum bid </li></ul></ul><ul><ul><li>Dutch auctions—multiple identical items starting at high price and moving lower </li></ul></ul>
  11. 11. Figure 9-4 Computerized Auction Clock for Dutch Flower Auctions Source : Used with permission of aquarius-flora.com.
  12. 12. Fundamentals (cont.) <ul><li>Dynamic pricing and auctions (cont.) </li></ul><ul><ul><li>Free fall (declining price) auction </li></ul></ul><ul><ul><ul><li>One item auctioned at a time </li></ul></ul></ul><ul><ul><ul><li>Price starts high and is reduced at fixed time intervals </li></ul></ul></ul><ul><ul><ul><ul><li>One buyer, many potential sellers </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Many sellers, many buyers </li></ul></ul></ul></ul>
  13. 13. Fundamentals (cont.) <ul><li>Dynamic pricing and auctions (cont.) </li></ul><ul><ul><li>Sealed-bid first-price auction—silent auction, only one bid; item goes to highest bidder </li></ul></ul><ul><ul><li>Sealed-bid second-price auction—item awarded to highest bidder, but at second bid (Vickrey auction) </li></ul></ul>
  14. 14. Benefits <ul><li>Benefits to sellers: </li></ul><ul><ul><li>Increase revenues by broadening customer base and shortening cycle time </li></ul></ul><ul><ul><li>Optimal price setting </li></ul></ul><ul><ul><li>Disintermediation—sellers gain more customer dollars by offering items directly </li></ul></ul><ul><ul><li>Better customer relationships—buyers and sellers have more time to interact, creating customer loyalty </li></ul></ul><ul><ul><li>Liquidation—sellers liquidate large quantities of obsolete items very quickly </li></ul></ul>
  15. 15. Benefits (cont.) <ul><li>Benefits to buyers: </li></ul><ul><ul><li>Opportunities to find unique items and collectibles </li></ul></ul><ul><ul><li>Chance to bargain—buyers can bid with seller for desired prices </li></ul></ul><ul><ul><li>Entertainment—interaction in auction can be entertaining and exciting </li></ul></ul><ul><ul><li>Anonymity—3 rd party allows buyer anonymity </li></ul></ul><ul><ul><li>Convenience—buyers trade from anywhere (even cell phone) </li></ul></ul>
  16. 16. Benefits (cont.) <ul><li>Benefits to auctioneers: </li></ul><ul><ul><li>Higher repeat purchase—auction sites garner higher repeat-purchase rates than e-commerce B2C sites </li></ul></ul><ul><ul><li>More “sticky” Web site (tendency of customers to stay at site longer and come back more often) </li></ul></ul><ul><ul><li>Expansion of auction business—Manheim Auctions </li></ul></ul><ul><ul><ul><li>Sell program cars as response to Japanese efforts to penetrate U.S. car auction business </li></ul></ul></ul><ul><ul><ul><li>80,000 car dealers involved </li></ul></ul></ul><ul><ul><ul><li>Provide services to customers </li></ul></ul></ul>
  17. 17. Limitations <ul><li>Possibility of fraud </li></ul><ul><ul><li>May purchase a defective product buying sight unseen </li></ul></ul><ul><ul><li>Fraud rate is very high </li></ul></ul><ul><li>Limited participation </li></ul><ul><ul><li>Invitation only </li></ul></ul><ul><ul><li>Open to dealers only </li></ul></ul><ul><li>Security </li></ul><ul><ul><li>C2C auctions not necessarily secure </li></ul></ul><ul><ul><li>B2B auctions conducted on highly secure private lines </li></ul></ul><ul><li>Software </li></ul><ul><ul><li>Few off-the-shelf packages that can handle auctions </li></ul></ul><ul><ul><li>“ Best practices” still being defined </li></ul></ul>
  18. 18. <ul><li>Strategic uses of auctions and pricing mechanisms </li></ul><ul><ul><li>Customers are attracted to e-auction markets because they provide greater liquidity than traditional ones </li></ul></ul><ul><ul><li>Efficient way to find best price at electronic auctions </li></ul></ul><ul><ul><li>Low cost provision of exceptional levels of transparency of market to operation and product quality </li></ul></ul>Economic Impacts
  19. 19. Economic Impacts (cont.) <ul><li>Strategic uses of auctions and pricing mechanisms (cont.) </li></ul><ul><ul><li>E-auction markets are more efficient than traditional markets </li></ul></ul><ul><ul><li>E-auctions can provide services at low transaction cost </li></ul></ul><ul><ul><li>Customers abandon a market that is not perceived as fair </li></ul></ul><ul><ul><li>Must manage all aspects of trading activities from initiation to settlement and delivery </li></ul></ul>
  20. 20. Economic Impacts (cont.) <ul><li>Strategic uses of auctions and pricing mechanisms (cont.) </li></ul><ul><ul><li>E-auction system must manage all aspect of trading activity </li></ul></ul><ul><ul><li>Delay in price response causes greater potential for feedback loops and instabilities </li></ul></ul><ul><ul><li>Order-driven e-auction markets demand that markets clearly define when a sale has been made </li></ul></ul>
  21. 21. Economic Impacts (cont.) <ul><li>Impacts </li></ul><ul><ul><li>Auctions as a coordination mechanism—establish equilibrium in price </li></ul></ul><ul><ul><li>Auctions as a social mechanism to determine a price </li></ul></ul><ul><ul><ul><li>Offer special items at a single time </li></ul></ul></ul><ul><ul><ul><li>Attract considerable attention </li></ul></ul></ul><ul><ul><ul><li>Auctions provide exposure of purchase and sale orders—liquidity </li></ul></ul></ul>
  22. 22. Economic Impacts (cont.) <ul><ul><li>Auctions as a highly visible distribution mechanism </li></ul></ul><ul><ul><ul><li>Deals with special offers </li></ul></ul></ul><ul><ul><ul><li>Use the mechanism to attract customers </li></ul></ul></ul><ul><ul><ul><ul><li>Bargain hunters </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Have preference for gambling dimension of auction process </li></ul></ul></ul></ul><ul><ul><li>Auction as a component in e-commerce </li></ul></ul>
  23. 23. Figure 9-6 The Components of Auctions Source : Modified from Klein (1997), p. 4.
  24. 24. <ul><li>Priceline model ( priceline.com ) </li></ul><ul><ul><li>Enables consumers to achieve significant savings by naming their own price for goods and services (C2B) </li></ul></ul><ul><ul><li>Presents consumer offers to sellers who can fill the demand—if no success, customer ups the bid (type of reverse auction) </li></ul></ul><ul><ul><li>Priceline uses its database of vendors’ minimum prices to match supply against requests </li></ul></ul><ul><ul><li>C2B reverse auction—vendors submit offers and lowest-priced vendor gets the job </li></ul></ul>“ Name-Your-Own-Price” C2B Model
  25. 25. “ Name-Your-Own-Price” C2B Model (cont.) <ul><li>Other models </li></ul><ul><ul><li>Savvio.com—model for travelers </li></ul></ul><ul><ul><ul><li>Real-time declining-price auction </li></ul></ul></ul><ul><ul><ul><li>Full disclosure of itinerary details </li></ul></ul></ul><ul><ul><ul><li>Discounted international and domestic air travel and cruise tickets </li></ul></ul></ul><ul><ul><li>Asiatravel.com allows travelers to place an RFQ, then asks vendors to bid on it </li></ul></ul>
  26. 26. Auction Process and Software Support <ul><li>Phase 1: Searching and comparing auctions and their prices </li></ul><ul><ul><li>Mega-searching and comparisons </li></ul></ul><ul><ul><ul><li>AuctionWatch.com —directory of auction sites </li></ul></ul></ul><ul><ul><ul><li>Internetauctionlist.com —news about e-auctions and specialty auctions worldwide </li></ul></ul></ul><ul><ul><ul><li>Yahoo!’s auction list—400 auction-related links </li></ul></ul></ul><ul><ul><ul><li>Bidder’s Edge—searches eBay, Yahoo, Amazon for specific items </li></ul></ul></ul><ul><ul><ul><li>Turbobid—provides mega-search series that helps local bidders find items from a pool of </li></ul></ul></ul><ul><ul><ul><li>e-action sites </li></ul></ul></ul>
  27. 27. Auction Process and Software Support (cont.) <ul><ul><li>Automated search services </li></ul></ul><ul><ul><ul><li>Notify buyers when items they are interested in are available </li></ul></ul></ul><ul><ul><ul><li>Buyers complete a simple form about the item </li></ul></ul></ul><ul><ul><li>Browsing site categories </li></ul></ul><ul><ul><ul><li>Directory of categories for buyers to browse—narrows their search </li></ul></ul></ul><ul><ul><ul><li>May allow sorts by times auctions are held </li></ul></ul></ul><ul><ul><li>DBasic and advanced searching </li></ul></ul><ul><ul><ul><li>Buyers use search engines to look for a single term, multiple terms, key words </li></ul></ul></ul><ul><ul><ul><li>Advanced search requires a form to be filled out </li></ul></ul></ul>
  28. 28. Auction Process and Software Support (cont.) <ul><li>Phase 2: Getting started at an auction </li></ul><ul><ul><li>Registration and profiling </li></ul></ul><ul><ul><ul><li>Sellers and buyers register before entering the auction </li></ul></ul></ul><ul><ul><ul><ul><li>Names </li></ul></ul></ul></ul><ul><ul><ul><ul><li>User Ids </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Passwords </li></ul></ul></ul></ul><ul><ul><ul><li>Buyers can check seller’s profile </li></ul></ul></ul><ul><ul><li>Listing and promoting </li></ul></ul>
  29. 29. Auction Process and Software Support (cont.) <ul><li>Advertising wizard— helps users create attractive ads and auction postings </li></ul><ul><li>Auction assistant— helps create attractive auction listings </li></ul><ul><li>Auction eposter98— makes it simple to add pictures, program interacts with eBay </li></ul><ul><li>Auction wizard— auction-posting tool that saves cutting and pasting when uploading items for sale </li></ul><ul><li>Mister Lister on eBay— allows sellers to upload many items at a time </li></ul><ul><li>Bulk Loader— seller can load several auctions into spreadsheet programs </li></ul>
  30. 30. Auction Process and Software Support (cont.) <ul><ul><li>Pricing </li></ul></ul><ul><ul><ul><li>To post an item for bidding, sellers must decide on: </li></ul></ul></ul><ul><ul><ul><ul><li>Minimum bid amount </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Bid increment </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Reserve price (lowest price seller is willing to accept) </li></ul></ul></ul></ul><ul><ul><ul><li>Search past auctions and the transacted prices to provide a benchmark for buyer’s bidding strategy </li></ul></ul></ul>
  31. 31. <ul><li>Phase 3: The actual bidding </li></ul><ul><ul><li>Bid watching and multiple biddings </li></ul></ul><ul><ul><ul><li>Buyers visit the user page of an </li></ul></ul></ul><ul><ul><ul><li>e-auction Web site at any time to check status of an auction </li></ul></ul></ul><ul><ul><ul><li>They can review bids and auctions </li></ul></ul></ul><ul><ul><ul><li>Tools provided in the U.S. to view bids across several auction sites </li></ul></ul></ul><ul><ul><ul><ul><li>BidWatch </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Bid Monitor </li></ul></ul></ul></ul><ul><ul><ul><ul><li>EasyScreen Layout </li></ul></ul></ul></ul>Auction Process and Software Support (cont.)
  32. 32. Auction Process and Software Support (cont.) <ul><li>Auto-snipping–the act of entering a bid during the very last seconds of an auction and outbidding the highest bidder </li></ul><ul><li>E-proxy bidding—software system bids on behalf of the buyers </li></ul><ul><ul><li>Buyer determines the maximum bid </li></ul></ul><ul><ul><li>Place first bid manually </li></ul></ul><ul><ul><li>Proxy executes the bids keeping bids as low as possible </li></ul></ul>
  33. 33. Auction Process and Software Support (cont.) <ul><li>Phase 4: Post-auction follow-up </li></ul><ul><ul><li>Post auction notifications </li></ul></ul><ul><ul><ul><li>Bidding notifications </li></ul></ul></ul><ul><ul><ul><li>End-of-auction notices </li></ul></ul></ul><ul><ul><ul><li>Seller notices </li></ul></ul></ul><ul><ul><ul><li>Postcards and thank-you notes </li></ul></ul></ul><ul><ul><li>User communication </li></ul></ul><ul><ul><ul><li>Chat groups </li></ul></ul></ul><ul><ul><ul><li>Mailing lists </li></ul></ul></ul><ul><ul><ul><li>Message boards </li></ul></ul></ul><ul><ul><li>Feedback and rating </li></ul></ul>
  34. 34. Auction Process and Software Support (cont.) <ul><li>Phase 4: Post-auction follow-up (cont.) </li></ul><ul><ul><li>Pricing and billing </li></ul></ul><ul><ul><li>Payment methods </li></ul></ul><ul><ul><ul><li>Electronic transfer service </li></ul></ul></ul><ul><ul><ul><li>Escrow service </li></ul></ul></ul><ul><ul><ul><li>Credit-card payment </li></ul></ul></ul><ul><ul><li>Shipping and postage </li></ul></ul><ul><ul><ul><li>Internet shippers </li></ul></ul></ul><ul><ul><ul><li>Internet postage </li></ul></ul></ul>
  35. 35. Figure 9-7 The Process of E-Auctions
  36. 36. Auction Process and Software Support (cont.) <ul><li>Reverse price auction—lowest price a seller is willing to accept </li></ul><ul><li>Vertical auction—specialized auctions know as “auction vortals” </li></ul><ul><ul><li>Used in B2B </li></ul></ul><ul><ul><li>Many auction sites specialize in one area </li></ul></ul><ul><li>Bid retraction </li></ul><ul><ul><li>Cancellation of a bid by a bidder, used only in special circumstances </li></ul></ul><ul><ul><li>Bids are usually considered to be binding </li></ul></ul><ul><li>Featured auctions </li></ul><ul><ul><li>Extra exposure when listed on Web sites </li></ul></ul><ul><ul><li>Sellers pay extra for this service </li></ul></ul>Additional terms and rules
  37. 37. Auctions on Private Networks <ul><li>Pigs in Singapore and Taiwan </li></ul><ul><ul><li>Conducted on private networks more than 10 years </li></ul></ul><ul><ul><li>Forward auction of pigs that are brought to a physical site while data is displayed to bidders </li></ul></ul><ul><ul><li>Computers monitor bidder’s financial capability </li></ul></ul>
  38. 38. Auctions on Private Networks (cont.) <ul><li>Cars in Japan’s Aucnet </li></ul><ul><ul><li>Auctioned used cars to dealers on television </li></ul></ul><ul><ul><li>Moved to private network, then on to Internet and into the U.S. but closed in 1998 </li></ul></ul><ul><ul><li>Today in Japan these auctions sell: </li></ul></ul><ul><ul><ul><li>Computer hardware </li></ul></ul></ul><ul><ul><ul><li>Software </li></ul></ul></ul><ul><ul><ul><li>Services like insurance and leasing </li></ul></ul></ul><ul><li>Livestock in Australia—electronic online system for trading cattle and sheep </li></ul>
  39. 39. <ul><li>Double auctions </li></ul><ul><ul><li>Single auction </li></ul></ul><ul><ul><ul><li>Item is offered for sale with multiple buyers making bids on the item </li></ul></ul></ul><ul><ul><ul><li>Multiple sellers make offers to sell an item </li></ul></ul></ul><ul><ul><li>Double auction </li></ul></ul><ul><ul><ul><li>Multiple units of a product may be auctioned off at the same time </li></ul></ul></ul><ul><ul><ul><li>Buyers and sellers can make bids during trading periods </li></ul></ul></ul><ul><ul><li>Prices in double auctions—multiple buyers and sellers </li></ul></ul>Double Auctions, Bundle Trading, and Pricing Issues
  40. 40. Double Auctions, Bundle Trading, and Pricing Issues (cont.) <ul><li>Bundle trading—personalization and customization of products and services </li></ul><ul><ul><li>Collection of complementary goods and services (e.g., airline tickets, hotel reservations, rental cars) </li></ul></ul><ul><ul><li>Simplified, efficient alternative solution to purchasing from multiple sellers </li></ul></ul><ul><ul><li>Management and operation of bundle markets is complex and differs considerably from single or double auction markets </li></ul></ul>
  41. 41. Double Auctions, Bundle Trading, and Pricing Issues (cont.) <ul><li>P rices in auctions: higher or lower? </li></ul><ul><ul><li>Prices tend to be higher when there is only one seller </li></ul></ul><ul><ul><li>Auctioneer has a better position to maximize revenues </li></ul></ul><ul><ul><li>Prices are lower in cases of liquidation </li></ul></ul><ul><ul><li>Seller’s objective is to sell as quickly as possible </li></ul></ul>
  42. 42. Double Auctions, Bundle Trading, and Pricing Issues (cont.) <ul><li>Pricing strategies in online auctions </li></ul><ul><ul><li>Both sellers and buyers may develop strategies for auctions </li></ul></ul><ul><ul><li>Sellers have option to use different mechanisms </li></ul></ul><ul><ul><li>Buyers need to develop strategy regarding increases in bids and when to stop bidding </li></ul></ul>
  43. 43. Fraud in Auctions and Its Prevention <ul><li>Types of e-auction fraud </li></ul><ul><ul><li>Bid shielding—the use of phantom bidders to bid at a very high price when an auction begins </li></ul></ul><ul><ul><li>Shilling—sellers arrange to have fake bids placed on their items to artificially jack up prices </li></ul></ul><ul><ul><li>Fake photos and misleading descriptions—sellers distort items (e.g., borrowing images, ambiguous descriptions) </li></ul></ul><ul><ul><li>Improper grading techniques—description of the condition of an item may be interpreted differently between seller and buyer </li></ul></ul>
  44. 44. Fraud in Auctions and Its Prevention (cont.) <ul><ul><li>Selling reproductions </li></ul></ul><ul><ul><li>High shipping cost and handling fees—selling a reproduction described as an original </li></ul></ul><ul><ul><li>Failure to ship merchandise—money is paid out but merchandise never arrives </li></ul></ul><ul><ul><li>Loss and damage claims—buyers claim they never received an item or received it in damaged condition, request a refund </li></ul></ul><ul><ul><li>Switch and return—seller accepts a return, but receives broken or mangled objects </li></ul></ul>
  45. 45. <ul><li>Protecting against e-auction fraud </li></ul><ul><ul><li>User identity verification—voluntary program encourages users to supply eBay with information for online verification—qualifies them for highest level of verification </li></ul></ul><ul><ul><li>Authentication service—determines whether an item is genuine and described appropriately </li></ul></ul><ul><ul><li>Grading services—determines physical condition of an item </li></ul></ul><ul><ul><li>Feedback forum—provides users with ability to comment on their experiences with other individuals </li></ul></ul>Fraud in Auctions and Its Prevention (cont.)
  46. 46. Fraud in Auctions and Its Prevention (cont.) <ul><ul><li>Insurance policy—eBay offers insurance underwritten by Lloyd’s of London at no cost to eBay users </li></ul></ul><ul><ul><li>Escrow services—items valued at more than $200, eBay recommends escrow services (for a fee) </li></ul></ul><ul><ul><li>Non-payment punishment—1 st -time nonpayment warning, 4 th offense is cause for suspension from auction </li></ul></ul>
  47. 47. Fraud in Auctions and Its Prevention (cont.) <ul><ul><li>Appraisal services—use a variety of methods to appraise items </li></ul></ul><ul><ul><ul><li>Assessment of authenticity and condition </li></ul></ul></ul><ul><ul><ul><li>Review of what comparable items have sold for in recent months </li></ul></ul></ul><ul><ul><li>Verifications—a way of confirming the identity and evaluating the condition of an item </li></ul></ul>
  48. 48. <ul><li>Bartering—exchange of goods and services </li></ul><ul><ul><li>Bartering exchanges </li></ul></ul><ul><ul><ul><li>Give your offer to intermediary </li></ul></ul></ul><ul><ul><ul><li>Intermediary asses value of your product or service in”points” </li></ul></ul></ul><ul><ul><ul><li>Use “points” to buy what you need </li></ul></ul></ul><ul><ul><li>Bartering sites must be financially secure </li></ul></ul><ul><ul><li>Alternative to bartering is to auction surplus and then use the money collected to buy items needed </li></ul></ul>Bartering Online
  49. 49. Negotiating and Bargaining Online <ul><li>Dynamic prices can be determined by negotiation </li></ul><ul><li>Negotiated prices result from interactions and bargaining among sellers and buyers </li></ul><ul><ul><li>Expensive items like cars and real estate </li></ul></ul><ul><ul><li>Deal with nonpricing terms like payment method and credit </li></ul></ul>
  50. 50. Negotiating and Bargaining Online <ul><li>Three factors that facilitate negotiated prices </li></ul><ul><ul><li>Intelligent agents that perform searches and comparisons </li></ul></ul><ul><ul><li>Computer technology that facilitates negotiation process </li></ul></ul><ul><ul><li>Products and services that are bundled and customized </li></ul></ul>
  51. 51. Negotiating and Bargaining Online (cont.) <ul><li>Technologies for bargaining </li></ul><ul><ul><li>Search—gathering information about products, services, potential vendors and customers </li></ul></ul><ul><ul><li>Selection—processing and filtering information in order to select a product and trading partner </li></ul></ul><ul><ul><li>Negotiation—interactions with bids, offers, agreements, and contracts </li></ul></ul><ul><ul><li>Continuing selection and negotiation—repeated sequentially until an agreement is reached </li></ul></ul><ul><ul><li>Transaction completion—payment and delivery </li></ul></ul>
  52. 52. <ul><li>Benefits of online auctions </li></ul><ul><ul><li>Convenience and ubiquity </li></ul></ul><ul><ul><li>Simpler and faster </li></ul></ul><ul><ul><li>Privacy </li></ul></ul><ul><li>Limitations of online auctions </li></ul><ul><ul><li>Visual quality </li></ul></ul><ul><ul><li>Memory capacity </li></ul></ul><ul><ul><li>Security </li></ul></ul>Mobile Auctions
  53. 53. <ul><li>General auctions—face regular problems of selling online in international environment </li></ul><ul><li>Selling art online in real-time auctions—allows real-time auction bidding and partners with eBay </li></ul><ul><li>Strategic alliances—major impact on competition and industry structure </li></ul>Future of Auctions
  54. 54. Managerial Issues <ul><li>Your own auction site vs. a third-party site </li></ul><ul><li>Cost benefit analysis </li></ul><ul><li>Auction strategies </li></ul><ul><li>Support services </li></ul><ul><li>Payment </li></ul>
  55. 55. Managerial Issues (cont.) <ul><li>Controlling what is auctioned </li></ul><ul><li>Change agent </li></ul><ul><li>Building auction applications </li></ul><ul><li>Bartering </li></ul><ul><li>Building auction sites </li></ul>
  56. 56. Figure 9-9 Components of a Comprehensive Auction Site
  57. 57. Figure 9-10 Integrated Auction Business Model
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