Bidder’s Behavior Model and Seller Revenue in eBay’s Buy It Now option

Auction with a buy price is the combination of auction and fixed price market, where buyers can either make a purchase immediately using the buy price previously set by the seller, or enter a bidder process in order to search for a better deal. EBay has adopted this idea and created their own version of auction with a buy price where the choices are only offered to the first customer. Bidders, when fully informed of how this system works, would behave so that they can maximize their expected payoffs. Hence, sellers, based on how rational customers act, would like to see how their revenue is generated under two types of auction available in eBay right now: the normal auction-style listing and the Buy It Now auction listing