Auctioning Horizontally Differentiated Items
AbstractThis paper analyses strategic market allocation by two auc- tioneers holding substitutes. It characterizes both the cooperative and com- petitive outcomes. Under cooperation or competition with close substitutes, bidders are allocated according to the expected total surplus each generates. This market division is efficient if and only if the distribution of bidders? tastes is not skewed. If skewed, reserve prices distort participation towards the least preferred item. For greater degrees of product differentiation compe- tition leads to multiple equilibria. Finally, competition with close substitutes sellers leave participation rents to their weakest bidder. They do not in other cases, whether they compete or cooperate.
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Bibliographic InfoArticle provided by Springer in its journal Review of Industrial Organization.
Volume (Year): 33 (2008)
Issue (Month): 2 (September)
Contact details of provider:
Web page: http://www.springerlink.com/link.asp?id=100336
Competition; English auction; Horizontal product differentiation; Reserve price;
Other versions of this item:
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
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