ABSTRACT
Mechanisms: Auctions vs. Posted Price...........95 5.6 Conclusions and Future Trends .....................................................................96 References................................................................................................................97
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. They are now an important component of the portfolio of mercantile processes that are transforming the economy from traditionally hierarchical to market-oriented structures (see Ref. 16 for an exhaustive review). A broad and deep body of economics literature exists that investigates the theoretical properties of traditional auctions. However, significant differences in the cost structures, to both buyers and sellers participating in online auctions, have resulted in a need to revisit much of the existing theory. This chapter provides a broad context, derived from an overview of the current research and practice in this field, and provides insights into this interesting sphere of economic activity.
