Dynamic Pricing and Auction - Department of Industrial Engineering ...

Calculating the optimal reserve priceNet expected gain per increment in r *n-1 n-1nFr · () .[1- Fr ( + δ)]. δ nFr · () .[ Fr ( + δ)- Fr ()]. r∆ ( δ ) =δ−Taking the limit:n-1∆ ( δ) = nF · () r .{[1- F ()] r −f (). r r}lim δ →0Setting ∆=0:[1- Fr(*)]r*=f(*)rδ