A Study On Online Reverse Auctions Based On Priceline

With the development of Internet and the rise of NYOP pricing model in tourism industry, customers’behavior characteristics have already changed and the factors affecting customers to purchase with optimal price have new changes currently. With an example of the reverse auction model by which the customer books a hotel in Priceline, the research discusses how customer price saving is affected by bidding behavior, hotel feature, and customer characteristics, comparing the price difference between what the customer books in traditional hotel website and Priceline. Overall, the research gets the following results:、The research proves that price saving is affect by start price, bidding range and bidding frequency in customer bidding behavior, hotel stars and occupancy days in hotel features, and gender in customer characteristics. The results shows that start price, bidding frequency and hotel stars have significant positive effect to the price saving. Bidding range, occupancy days and gender have remarkable negative effect. The effect of hotel stars, bidding range and gender are relatively great.2、Discussing the empirical analysis result of the extended model based upon hotel star classification, the research shows that the effect factors to the incidence of price saving have certain difference for customers who have different purchasing power in the reverse auction. The customers with strong purchasing power have low sensitiveness to price and they hope to win the bidding by increasing bidding range. The research also demonstrates that the customer occupancy days have a lower negative effect to price saving for the hotel with high star level.3、Discussing the empirical analysis result of the extended model based upon customer gender classification, the research finds that men have more possibility to increase bidding range to win a bid, but women may decrease the bidding range to get more price saving. Besides, the bidding frequency of women affects price saving more than men, so bidding frequency is more important to price saving for woman customers.4、The research designs and builds a customer utility model including emotional and monetary utility, constructs a formula of the customer participation willingness, and discusses that some optimal prices of customers with different participation willingness in different situation will be higher when the care degree of customers to win a bidding increases, but others will be lower when the care degree to bidding price saving increases. The research finds that this result coincides to the different bidding behavior between man and woman customers to a certain degree.