Name Your Own Price

The "Name-Your-Own-Price" (NYOP) is a system under which buyers make a suggestion for a product’s price (unlike the traditional way where sellers quote a certain price) and the transaction occurs only if a seller accepts this quoted price. What happens is that the seller waits for a potential buyer's offer and can then either accept or reject that 'named price' that the user had offered. As the Internet is continuously being developed and the online marketplaces are becoming increasingly more popular, consumers have more choices in terms of product pricing. Popularised by the reverse auction pioneer, Priceline.com, such pricing strategy asks consumers to 'name their own price' for various products and services like air tickets, hotels, rental cars, ... etc. The first bid a consumer places and the subsequent bid increments express the consumer's willingness or unwillingness to haggle. "The economic argument is that the number of bids a consumer submits to win a product in a NYOP auction is determined by the bidder’s intention to trade off higher expected savings from haggling against the associated frictional costs" . NYOP retailers do not post a price for their products, and the final price of the transaction is only determined via a "reverse auction process", and these are key features that distinguish hotels and travel intermediaries from NYOP retailers.