Managing online sales with posted price and open-bid auctions

摘要

We study the profitability of selling consumer goods online using posted price and open ascending-bid uniform-price auction simultaneously. We develop a model of consumer behavior when faced with the choice between the two channels. The model is simulated in order to identify the best designs of the dual channel regime and compare its performance with that of the only posted price regime. We find that the best designs of dual channels with open-bid auctions differ from those of dual channels with sealed-bid auctions previously studied. In addition, when optimally designed, the dual channel regime outperforms the posted price regime.