New ways to organize the digital business model “Buy to participate pricing”

Pay-per bid ascending auctions are a new type of a digitized auction business model. In the form of entertainment-shopping auctions they are new exciting, fast-paced B-to-C online businesses that are attracting significant interest from consumers and start-ups. It is unique because participants have to pay a fee for each time they increase the auction price. The theoretical model suggests revenue equivalence between different price increments. We will show that only in mixed strategies there is a symmetric subgame perfect equilibrium.