Two ending rules, a soft close and a hard close, exist in Internet auctions. In hard close auctions, each auction ends with a fixed deadline determined by a seller. In soft close auctions, the end time automatically extends if at least one bid is submitted in the last few minutes, so each buyer has an opportunity to reply to other buyers' bids. The reserve prices set by the seller in hard close auctions are higher than the reserve prices in soft close auctions. The result is consistent with data of DS Lite auctions in Yahoo! Japan.

Demand reduction causes extremely low revenues in uniform‐price auctions, which can be interpreted as implicit collusion among bidders. We model a uniform‐price auction with a buyout option and investigate its potential for alleviating implicit collusion. We focus on the extreme case that yields a revenue of zero with no buyout option. Our main result is that the seller obtains a positive expected revenue unless the buyout price is high. Notably, a bidder will exercise a buyout option even though the bidder is risk neutral; that is, auction aversion is fully endogenous, in contradiction to the findings of previous work.

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