#34unit 2online auctions
Benefits and cost of online auction
The advantages and drawbacks of online auctions.
Unit 2Online AuctionsTopic #34Published
Benefits and cost of online auction
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Online auctions offer benefits like liquidity, price discovery, price transparency, market efficiency, lower transaction costs, consumer aggregation and network effects. But they also carry costs and risks: delayed consumption, monitoring, equipment, trust risks, and fulfilment costs — plus merchant risks like low prices, non-payment, and bid rigging.
- List the economic benefits of online auctions for consumers and merchants.
- Identify the costs and risks of participating in auctions.
- Explain network effects in auction markets.
- Describe the merchant risks of online auctions.