Risk management for online auction sellers: Options approach to manage price and quantity related risks

Ram Gopal, Y. Alex Tung, Rajeev Kumar, Ravi Bapna

Research output: Chapter in Book/Report/Conference proceedingConference contribution

Abstract

In online auctions, sellers typically face two types of risks: 1) uncertainty regarding the success of an auction ("quantity related" risk), and, 2) uncertainty in the auction-ending price ("price related" risk). Prior literature has proposed measures to manage these risks, albeit individually rather than jointly. In this paper, we propose a risk management tool, drawn and developed from the concept of put options the enables sellers to manage both of these risks for online auction settings.

Original languageEnglish (US)
Title of host publicationWITS 2007 - Proceedings, 17th Annual Workshop on Information Technologies and Systems
PublisherSocial Science Research Network
Pages115-120
Number of pages6
StatePublished - Jan 1 2007
Event17th Workshop on Information Technologies and Systems, WITS 2007 - Montreal, QC, Canada
Duration: Dec 8 2007Dec 9 2007

Other

Other17th Workshop on Information Technologies and Systems, WITS 2007
CountryCanada
CityMontreal, QC
Period12/8/0712/9/07

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