Is there a known formula to calculate perceived value? If I am auctioning some popular product that is worth $100 (shelf price), how much would people bid if they:
- Have a 1 in
C
chance of winning the product. - Will forfeit
P
of their bid amount if they lose.
B
= Average bid.
V
= Shelf value of the product.
C
= # of bidders.
P
= Percentage of bid amount forfeited for losing.
I'm looking for a formula in which I can plug in values for the variables V
, C
, and P
.
I'm not too "mathy" so I don't really know what tags to apply to this question, sorry about that.