Reverse pricing is a market mechanism under which a consumer's bid for a product leads to a sale if the bid exceeds a hidden acceptance threshold the seller has set in advance. The seller faces two key decisions in designing such a mechanism: First, he must decide where in the process to collect...

Advances in information technology have led to a substantial increase in the use of interactive pricing mechanisms, where buyers (i.e., consumers) and sellers (i.e., retailers) enter a formal computer-mediated price-negotiation process during which consumers submit bids for a specific product....