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Competition in online markets with auctions and posted prices

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  • Alexander Maslov

    (Vanderbilt University)

Abstract

The paper studies an online consumer-to-consumer market with limited supply, where sellers may list their items by posted prices or auctions. I show that when there is competition among sellers, they use only posted prices in the equilibrium. This result contrasts with the findings for a monopolistic seller listing objects by auctions and posted prices on markets with infinite supply, where using both mechanisms is the equilibrium. The model helps to explain the trends documented in Einav et al. (J Polit Econ 126(1):178–215, 2018).

Suggested Citation

  • Alexander Maslov, 2022. "Competition in online markets with auctions and posted prices," Journal of Economics, Springer, vol. 137(2), pages 145-169, October.
    • Handle: RePEc:kap:jeczfn:v:137:y:2022:i:2:d:10.1007_s00712-022-00784-w
    DOI: 10.1007/s00712-022-00784-w
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    References listed on IDEAS

    as
    1. Peters, Michael & Severinov, Sergei, 1997. "Competition among Sellers Who Offer Auctions Instead of Prices," Journal of Economic Theory, Elsevier, vol. 75(1), pages 141-179, July.
    2. Bulow, Jeremy & Klemperer, Paul, 1996. "Auctions versus Negotiations," American Economic Review, American Economic Association, vol. 86(1), pages 180-194, March.
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    4. Liran Einav & Chiara Farronato & Jonathan Levin & Neel Sundaresan, 2018. "Auctions versus Posted Prices in Online Markets," Journal of Political Economy, University of Chicago Press, vol. 126(1), pages 178-215.
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    Cited by:

    1. Alexander Maslov, 2023. "Auctions versus posted prices in the revenue management of limited inventory," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(3), pages 1476-1490, April.

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    More about this item

    Keywords

    E-commerce; Auctions; Price posting; Competing mechanisms; Duopoly;
    All these keywords.

    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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