Jeux en ligne et jeux sur ordi - étude en anglais

1. Introduction:

Within this writing assignment the topic of internet auctions on eBay for electronic articles will be discussed using economical principles such as the theory of games first discovered by John von Neumann and Oskar Morgenstern in 1944 and the model of Demand and Supply introduced by Alfred Marshall. The theory of games was further developed by John Nash in the 1950’s and made useful for a wider spectrum than the criterion initially proposed by von Neumann and Morgenstern. Some of Nash’s economic influences to this theory is the widely known Prisoner’s Dilemma. Within this dilemma, the prisoners do not have the opportunity to communicate and their decisions are therefore independent, which will also be the case for the eBay auctions (Dixit and Nalebuff, 2010).

eBay, as the world’s largest online trading community with a global customer base of 233 million (ebay.co.uk, 2012) provides micropreneurs, any person that runs a small business, with an opportunity to make money from their existing assets, or in other words make use of their unused assets. The advantage of that is, that technology allows the users to create entirely new channels of distribution, which in turn can create substantial amounts of additional income. As the largest segment of eBay’s online auction offering, the electronic market is the highest revenue driving income source for the company and has exponentially increased throughout the dot-com bubble in the late 1990’s up until now(Liquori, Benjamin & Barbu, 2009). Therefore, eBay is an appropriate example for internet auctions and this writing assignment illustrates the iPad as an article auctioned from a B2C perspective.

2. Theory of Games:

A simplified, imaginative game including two players, who are customers willing to purchase an iPad on eBay. Each of the two players has a different personal value for the product, which is the monetary worth of a good from a personal perspective rather than a market perspective. Player A has a personal value of 400€ for the iPad, whereas Player B’s personal value for the same article is a little higher with 450€. Both players have the ability to choose from different possible strategies. The first strategy would be to bid less than the personal value and the second one would be bidding more than that figurative threshold. These conditions can be observed within the following set up:

More Less

More A: 450

B: 500 A: 350

B: 500

Less A: 450

B: 400 A: 350

B: 400

Figure 1: Payoff matrix (From author)

As one can see, Player A’s only opportunity to win the auction is bidding more than his personal value and therefore exceeding Player B’s bid of less than his personal value (Less B/More A). In the other three scenarios Player B will win the auction. Even if Player B bids less than his personal value, he is going to win the auction given that his opponent also bids less than his personal value (Less B/Less A). Moreover, in a scenario where Player B bids more than his personal value and Player A decides to do the same thing Player A will lose the auction (More B/More A). A very obvious win for Player B is described by scenario “More B/Less A” due to their different initial personal values.

3. eBay:

It is to mention that this game is not taking into account any other factors that would influence the decision of both players and therefore is to be considered ceteris paribus. Moreover, a bidding difference of 50€ is not a realistic eBay situation, as the bidding is made with 0.50€ differences. eBay users use a bidding agent that automatically bids for them. For instance Player A’s personal value is 400€, which is what he would fill into the tab on eBay. However, this is not the bid that the eBay agent will carry out. It is only a limit that the bidder has decided to pay. Once Player A put in that value, the agent will only always outbid another Player (such as Player B), by 50 cents instead of instantly bidding the maximum. This implies that Player B potentially has the opportunity to win the auction with a bid, much lower than his personal value for the article. The difference between what Player B is willing and able to pay and the price that he actually ends up paying is called the consumer surplus.

Paying less than their personal value can be called a strategy which emerges from the intention to save 50€ in this case. eBay with its close to infinite supply helps customers to win an auction at a low price. Nevertheless, the important point here is that customers have the possibility to try their luck with another iPad in case they were not successful with the first auction. The following iPad will provide the same amount of satisfaction and utility and the consumer therefore does not incur a high opportunity cost from switching from the one iPad to the next.

Within the following diagram one can observe the scenario (Less B/Less A) where B ends up paying 50€ less than his reservation price:

Figure 2: Price Discrimination (Ruby 2003)

In the diagram above there are various prices and relating quantities traded (P0, P1, P2; Q0, Q1, Q2) illustrated by different points on the demand curve (A, B, C). As the bids for the iPad increase from P2 to P0, the consumer surplus decreases up until the last little blue triangle is left. By gradually decreasing the consumer surplus and moving towards the reservation

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