This research analyzes how consumers' bidding costs and expectations about the threshold price impact a Name-Your-Own-Price (NYOP) retailer. We find that an NYOP retailer's profit may increase if consumers learn the product's true price threshold distribution. Inaccurate expectations can be...

In this paper, we propose the B-spline (BSP) method, which overcomes problems with the smoothed implied volatility smile (SML) method for estimating option implied risk-neutral measures (RNMs). We model the risk-neutral cumulative distribution function (CDF) using quartic B-splines with power...

Results from two studies demonstrate that depending on consumers’ network positions (peripheral or central), experts and novices behave differently when seeking information about their networks or products related to those networks. Experts in central network positions (vs. peripheral) seek...

This paper aims to shed light on the systemic nature of liquidity risk and to propose a method for calculating systemic liquidity shortages. Our method incorporates not only direct liquidity shortages but also indirect liquidity shortages due to the knock-on effects through interbank linkages....

The seller's threshold price in name-your-own-price auctions varies over time. However, consumers must bid without knowing when these variations occur because the threshold price is unobservable to them. This paper uses an analytical model and laboratory auctions to explore how the frequency of...

This paper defines a unique type of product or service offering, termed , and analyzes a novel selling strategy, termed (PS). A probabilistic good is not a concrete product or service but an offer involving a probability of getting any one of a set of multiple distinct items. Under the...

Although advance selling and probabilistic selling differ in both motivation and implementation, we argue that they share a common characteristic--both offer consumers a choice involving buyer uncertainty. We develop a formal model to examine the general economics of purchase options that...

This paper presents an initial examination of an emerging business model, the Name-Your-Own-Price (NYOP) channel, as popularized by priceline.com. Focusing on how to optimally structure such market interactions, I ask whether it is more profitable to restrict individuals to a single bid, as is...

Shipping-fee schedules are an important but underresearched element of the marketing mix for direct marketers. This paper provides an empirical study on the impact of shipping and handling charges on consumer-purchasing behavior. Using a database from an online retailer that has experimented...