23.4. The BARISTA: A Three-Stage Nonhomogeneous Poisson Process

In this section we describe our model for bid arrivals. The model captures the two main features of bid arrivals in online auctions described earlier: the three different stages and the self-similarity (with its breakdown). We call this process the BARISTA (Bid ARrivals In STAges), because it generates different intensities of activity^[]:

^[] We also call the stages the "espresso stage" (short and intense), "macchiato stage" (stained), and "ristretto stage" (extra intense), and hence the BARISTA.

Stage 1 – The auction start, characterized by an early burst of activity,