Meta-analysis of Online Auction

Aryan Lakshay Sharma Piyush Sharma

dept.of Computer Science dept.of Computer Science dept.of Computer Science
Chandigarh University Chandigarh University Chandigarh University
Kharar, India Kharar, India Kharar, India
22BCS15357@cuchd.in 22BCS15374@cuchd.in 22BCS15351@cuchd.in

Abstract: With an influence on trade in B2B, B2C, and consumer-

to-consumer (C2C) marketplaces, online auctions are becoming an II. TYPES OF AUCTION
essential part of e-commerce systems. A growing number of
companies are using online auctions to enhance their channels for There are several distinct types of auction mechanisms, each
sales and purchases as they gain popularity. The benefits and
with its own rules and bidding strategies. The most common
drawbacks of various auction procedures are discussed in this
article, with a focus on the advantages and challenges of online types of auctions are:
auctions over traditional auctions. The research also examines
prospective advancements in online auctions in the future and how • English auction: Bidders actively compete in real time,
they could impact global trade. either in person or digitally, in this kind of auction.
Starting at a minimal price, the auctioneer progressively
Index Terms: Competitive Bidding, E-Commerce, Online Escrow, raises it. Until there is only one bidder left, the item is
Dynamic Pricing, Bidding, and Auction Models won at the winning bid amount. Art, antiques, and luxury
objects are regularly sold at English auctions, where
I. INTRODUCTION competition and transparency drive prices upward.
One of the earliest commercial endeavours, auctions have
origins in ancient Rome and much older times. Auctions are • Dutch auction: In a Dutch auction, the price begins at a
employed in many different industries, from government high level and progressively drops until a bidder agrees
contracts to the sale of commodities like oil and lumber, as well to the going rate. This structure is used in marketplaces
as art and collectibles. With the development of the internet, the where deals that must be completed quickly, as the Dutch
process of modern auctions has greatly broadened, allowing flower markets, which gave rise to the term "Dutch
participation from all over the world through online auctions. auction." Without having to wait for rival offers to
Auctions have been used historically for many different things, increase, sellers want to locate a buyer as soon as
including as government contracts and licenses, as well as the possible.
sale of commodities and property. Auctions are the preferred
way to sell valuable commodities in today's market, such as real • First-price sealed-bid auction: In this type of auction,
estate, artwork, and even rare antiques. bidders place their digital or sealed envelope bids without
The highest bidder wins the products or services in an auction, being aware of each other's bids. The winner is the bidder
which is a type of economic activity that has evolved over time. who places the highest price. When competing bidders
Online auctions have eliminated geographical restrictions, vie for a project or licence and the winning offer
enabling more ease and accessibility, whereas previous auctions represents the highest price a bidder is prepared to pay,
frequently needed a physical presence. The popularity of online this strategy is frequently employed in government
auctions as a dynamic price mechanism has increased further contract bidding.
with the spread of internet-enabled gadgets.
• Second-price sealed-bid auction (Vickrey auction):
Offers are made in sealed form, and the top bidder only
A. Historical Context has to pay the amount that is second-highest to win the
The Latin word "augeo," which meaning "to increase," is where item. This kind of auction, which is useful in avoiding
the term "auction" first appeared. Auctions have been recorded overbidding, is mostly employed in theoretical models of
in history since the Praetorian Guard put the Roman Empire up auctions and occasionally in advertising auctions, like the
for auction in 193 AD. Since then, selling a wide range of items bidding process for Google AdWords.
has made auctions a sophisticated economic process.
Governments have utilised auctions in the modern era to
distribute limited resources. For example, the US frequently
holds auctions to sell Treasury bonds and distribute licenses to A. Comparison of Auction Types
dig for oil and gas, while the Indian government regularly sells Each auction type presents distinct advantages and disadvan-
off telecom spectrum to mobile companies. Financial markets, tages for both the seller and the bidder. The following table
where commodities and securities are traded through bidding outlines the key differences.
procedures, also employ auction systems.
 TABLE I • Fraud and fakes: Online listings could not be accurate,
COMPARISON OF DIFFERENT AUCTION TYPES and dishonest vendors or purchasers might cause havoc.
Problems still exist even though websites like eBay have
English Auction Dutch Auction Sealed-bid Auctions implemented buyer protection mechanisms to stop fraud.
Pro Transparent bidding process Faster resolution Privacy for bidders • Privacy concerns: Users need to have faith that the
s
Con Can be time-consuming Seller risks low price Risk of overpaying
platform will safeguard private information, including
s payment information and personal information. As data
breaches and cyberattacks increase in frequency, privacy
issues continue to pose a serious threat.
III. WHY ONLINE AUCTIONS? • Complexity of transactions: Managing online delivery,
feedback, and payment may be challenging, particularly
Online auction systems can solve a number of the restrictions when handling foreign transactions. Currency conversions,
that traditional auctions, despite their effectiveness, have. Time, customs procedures, and shipping delays can all make the
location, and the number of attendees are the three main process more difficult.
constraints for physical auctions. Conversely, online auctions • Overbidding: Because online auctions are competitive,
make use of internet technology to facilitate worldwide participants may feel compelled to bid more than they had
participation, so creating a much wider market. planned to. This is particularly typical in rare or expensive
The popularity of online auctions has been greatly aided by the item auctions, when buyers may develop strong emotional
growth of e-commerce. Users now have little obstacles to entry attachments to the objects up for grabs.
when engaging in auction-based transactions thanks to websites
like Amazon, uBid, eBay, and uBid. Customers may obtain • FUTURE TRENDS IN ONLINE AUCTIONS
products that might not be accessible locally, while sellers can
reach a worldwide audience. Technology development will have a significant impact on
Advantages of Online Auctions online auctions in the future. The future of this industry is
anticipated to be shaped by a number of developing trends.
Online auctions provide several benefits, which have led to
their widespread adoption. Some key advantages include: • Blockchain Technology: Online auctions may
• Convenience: Participants do not need to physically undergo a revolution if blockchain is used to facilitate
attend the auction; they may join from any location with safe, transparent transactions. Blockchain can guarantee
internet connection. This feature has shown to be that all transactions are carried out honestly and offer a
particularly helpful during the COVID-19 epidemic, when tamper-proof record of bids, lowering the possibility of
the cancellation of physical events led to a rise in demand fraud.
for online auctions. • Artificial Intelligence: It's anticipated that more and
• Information access: Before bidding, bidders may more auction platforms will be powered by AI. AI can
carefully investigate products, sellers, and bidding histories anticipate winning bids, aid with bidding strategy
using online platforms. Clear and comprehensive optimisation, and offer tailored suggestions based on
descriptions guarantee that bidders have all the information user behaviour. Online auction platforms may
they need to make an informed choice. potentially employ chatbots with AI capabilities for
• Time-saving: The online method reduces waiting times customer support.
between bidding rounds by doing away with the need for • Virtual Reality Auctions: Particularly for high-end
travel and enabling faster auctions. Furthermore, online art and real estate auctions, virtual reality auctions may
auctions frequently run around the clock, enabling users to become the norm as VR technology becomes more
participate whenever it's convenient for them. widely available. In a virtual environment, participants
• Global reach: The ability for bidders and sellers to would be able to "attend" the auction, examine the
participate increases the pool of possible participants and objects in three dimensions, and communicate with
the level of competition. This global reach not only other bids.
increases the cost of rare and in-demand goods but also • Mobile Auctions: As more people utilise mobile
exposes customers to a wider selection of goods. devices, it is anticipated that auctions will adapt to make
• Many auctions: By participating in many auctions at them more mobile-friendly. Online auctions will
once, participants can raise the likelihood that an item will become even more accessible with the continued growth
be successfully sold. Customers that are interested in a of apps that let customers bid while they're on the road.
variety of product categories may find this option extremely
helpful. IV. CONCLUSION

• Disadvantages of Online Auctions With ease, a worldwide market, and a greater selection of
items up for bid, online auctions are a huge improvement in
Despite their benefits, online auctions also have notable draw- the auction industry. They do, however, also present
backs: difficulties including fraud, privacy issues, and the possibility
of overbidding. The evolution of online auctions is ongoing.
In order to take advantage of the potential these difficulties
present, both buyers and sellers must be aware of them.
The future of online auctions will be further shaped by cutting-
edge technologies like blockchain, AI, and VR, which will
increase their security, effectiveness, and immersiveness. Online
auctions are expected to become even more significant in
international trade in the years to come because to these
developments.

REFERENCES

[1] Available at http://en.wikipedia.org/wiki/auction

[2] Jarrod Trevathan, James Cook University, "Privacy and security in
auctions," 2007.
[3] "Auction and bidding: A primer," by Paul Milgrom, Journal of Economic
Perspectives, vol. 3, summer 1989
[4] "Replicating Online Yankee Auctions to Analyse Auctioneer's and
Bidder's Strategies," by Ravi Bapna et al. April of 2001
[5] "Managing Online Auctions: Current Business and Research Issues," by
Abraham Seidmann and Edieal J. Pinker, Management Science, vol. 49,
no. 11, Nov. 2003
[6] The benefits and drawbacks of online auctions are discussed at
http://www.jumboauction.com.