TY  - JOUR
AU  - Platt,Brennan C.
AU  - Price,Joseph
AU  - Tappen,Henry
TI  - Pay-to-Bid Auctions
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 15695
PY  - 2010
Y2  - January 2010
UR  - http://www.nber.org/papers/w15695
L1  - http://www.nber.org/papers/w15695.pdf
N1  - Author contact info:
Brennan Platt
Department of Economics
Brigham Young University
130 Faculty Office Building
Provo, UT 84602-2363
E-Mail: brennan_platt@byu.edu

Joseph Price
Department of Economics
Brigham Young University
162 FOB
Provo, UT 84602
Tel: 801/422-5296
Fax: 801/422-0194
E-Mail: joseph_price@byu.edu

Henry Tappen
Brigham Young University
130 FOB
Provo, UT 84602
E-Mail: htappen@gmail.com
AB  - We analyze a new auction format in which bidders pay a fee each time they increase the auction price.  Bidding fees are the primary source of revenue for the seller, but produce the same expected revenue as standard auctions.  Our model predicts a particular distribution of ending prices, which we test against observed auction data.  Our model fits the data well for over three-fourths of routinely auctioned items.  The notable exceptions are video game paraphernalia, which show more aggressive bidding and higher expected revenue.  By incorporating mild risk-loving preferences in the model, we explain nearly all of the auctions.
ER  -