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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:

  1. Have a 1 in C chance of winning the product.
  2. 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.

2 Answers 2