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Optimal Strategies for Selling an Asset

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Author Info

  • Donald B. Rosenfield

    (Arthur D. Little, Inc., Cambridge, Massachusetts)

  • Roy D. Shapiro

    (Harvard University)

  • David A. Butler

    (Oregon State University)

Registered author(s):

    Abstract

    This paper considers the problem of selling an asset on the open market. The seller receives a random sequence of price offers, which may arrive either periodically or randomly over time. After each offer is received, the seller must decide whether or not to sell, weighing the possibility of obtaining a better offer against the cost of waiting. A number of authors have established the properties of optimal selling policies when the distribution of offers is known and offers are received periodically. This paper investigates the conditions under which these same properties hold for an unknown offer distribution which is updated as successive offers are received.

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    File URL: http://dx.doi.org/10.1287/mnsc.29.9.1051
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    Bibliographic Info

    Article provided by INFORMS in its journal Management Science.

    Volume (Year): 29 (1983)
    Issue (Month): 9 (September)
    Pages: 1051-1061

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    Handle: RePEc:inm:ormnsc:v:29:y:1983:i:9:p:1051-1061

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    Related research

    Keywords: selling strategy; Bayesian updating; stopping rules; adaptive search;

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    Cited by:
    1. Eric Johnson & Suzanne Shu & Benedict Dellaert & Craig Fox & Daniel Goldstein & Gerald Häubl & Richard Larrick & John Payne & Ellen Peters & David Schkade & Brian Wansink & Elke Weber, 2012. "Beyond nudges: Tools of a choice architecture," Marketing Letters, Springer, vol. 23(2), pages 487-504, June.
    2. Chun, Young H., 1999. "Selecting the best choice in the full information group interview problem," European Journal of Operational Research, Elsevier, vol. 119(3), pages 635-651, December.
    3. Chun, Young Hak, 1997. "Rank-based selection strategies for the random walk process," European Journal of Operational Research, Elsevier, vol. 96(2), pages 417-427, January.
    4. Sofronov, Georgy, 2013. "An optimal sequential procedure for a multiple selling problem with independent observations," European Journal of Operational Research, Elsevier, vol. 225(2), pages 332-336.
    5. Chun, Young H. & Plante, Robert D. & Schneider, Helmut, 2002. "Buying and selling an asset over the finite time horizon: A non-parametric approach," European Journal of Operational Research, Elsevier, vol. 136(1), pages 106-120, January.

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