A business model for buy-to-participate pricing in e-commerce

This paper is the first to analytically and empirically analyse entertainment-shopping reveal auctions, the new exciting fast-paced business-to-consumer online auctions that were recently introduced on the internet and are attracting significant interest from consumers and start-ups. Reveal auctions are becoming popular because of their ability to provide incredible bargains. But bidders can privately observe the price only by paying a fee, and every time a bidder does so, the price falls by a predetermined amount. The theoretical model suggests revenue equivalence between different price increments. But the empirical results refute the theoretical predictions.