Analysis of bid strategy with game theory in auctions with a buyout price

The unprecedented growth of Internet has deeply infiltrated all of today's society. With more and more people using the Internet for a wide range of purposes, Internet use has become an absolute necessity for businesses to survive and grow. Online auction has been a particularly effective form of electronic commerce and is a promising field. Online auction often enable sellers to augment their auctions with a buyout price. The strategy of bidder is very important and has effect on seller's choice of auction form. Recent theoretical research shows the benefits of English auction with buyout price. In this paper we will show the bidder's strategy on eBay buy-it-now auction with game theory. There is an equilibrium which is the optimal for any first bidder.