The Emergence of Auctions on the World Wide Web

Auctions are formalized trading procedures in which the trading partners ‘interaction is governed by specific rules for competitive bidding and trade execution. Auction markets provide procedures for the exposure of purchase and sale orders to the market participants in order to determine the price of trade objects. Empirically we find a multiplicity of auction types with different trade objects, access rules for participants, and trading rules. During the 1980s electronic auctions have been developed and implemented which distributed not only information about the trade objects electronically but also executed the trading process itself as computer-mediated process. The extensive proliferation of electronic commerce on the Web has accelerated the diffusion of electronic auctions. In this chapter we will present a framework of constituting elements of auctions and discuss the impact of the Web on the proliferation of auctions. The move-to-the-market debate is used as background to scrutinize success factors and limitations of electronic auctions.