Bidding process in online auctions and winning strategy:rate equation approach

الأصل · EN

Online auctions have expanded rapidly over the last decade and have become a fascinating new type of business or commercial transaction in this digital era. Here we introduce a master equation for the bidding process that takes place in online auctions. We find that the number of distinct bidders who bid k times, called the k-frequent bidder, up to the t-th bidding progresses as nₖ(t) tk⁻².⁴. The successfully transmitted bidding rate by the k-frequent bidder is obtained as qₖ(t) k⁻¹.⁴, independent of t for large t. This theoretical prediction is in agreement with empirical data. These results imply that bidding at the last moment is a rational and effective strategy to win in an eBay auction.