IDEAS home Printed from https://ideas.repec.org/a/kap/revind/v33y2008i2p113-128.html
   My bibliography  Save this article

Auctioning Horizontally Differentiated Items

Author

Listed:
  • Sarah Parlane

Abstract

This paper analyses strategic market allocation by two auctioneers holding substitutes. It characterizes both the cooperative and competitive 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 competition 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.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Sarah Parlane, 2008. "Auctioning Horizontally Differentiated Items," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 33(2), pages 113-128, September.
    • Handle: RePEc:kap:revind:v:33:y:2008:i:2:p:113-128
    DOI: 10.1007/s11151-008-9182-z
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s11151-008-9182-z
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11151-008-9182-z?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Lars A. Stole, 1995. "Nonlinear Pricing and Oligopoly," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 4(4), pages 529-562, December.
    2. Bulow, Jeremy & Roberts, John, 1989. "The Simple Economics of Optimal Auctions," Journal of Political Economy, University of Chicago Press, vol. 97(5), pages 1060-1090, October.
    3. Michael Peters, 1997. "A Competitive Distribution of Auctions," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 64(1), pages 97-123.
    4. Bruno Biais & David Martimort & Jean-Charles Rochet, 2000. "Competing Mechanisms in a Common Value Environment," Econometrica, Econometric Society, vol. 68(4), pages 799-838, July.
    5. McAfee, R Preston, 1993. "Mechanism Design by Competing Sellers," Econometrica, Econometric Society, vol. 61(6), pages 1281-1312, November.
    6. Burguet, Roberto & Sakovics, Jozsef, 1999. "Imperfect Competition in Auction Designs," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(1), pages 231-247, February.
    7. Chen, Yongmin & Wang, Ruqu, 2004. "A model of competing selling mechanisms," Economics Letters, Elsevier, vol. 85(2), pages 151-155, November.
    8. 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.
    9. Roger B. Myerson, 1981. "Optimal Auction Design," Mathematics of Operations Research, INFORMS, vol. 6(1), pages 58-73, February.
    10. Roberto Burguet & Auctions, "undated". "The Condominium Problem," Working Papers 63, Barcelona School of Economics.
    11. Roberto Burguet, 2005. "The condominium problem; auctions for substitutes," Review of Economic Design, Springer;Society for Economic Design, vol. 9(2), pages 73-90, April.
    12. Parlane, S., 1998. "Contracting with Capacity Constrained Suppliers," Papers 98/4, College Dublin, Department of Political Economy-.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Deltas, George & Jeitschko, Thomas D., 2007. "Auction hosting site pricing and market equilibrium with endogenous bidder and seller participation," International Journal of Industrial Organization, Elsevier, vol. 25(6), pages 1190-1212, December.
    2. Landi, Massimiliano & Menicucci, Domenico & Sarychev, Andrey, 2023. "Competing auctions with non-identical objects," Journal of Mathematical Economics, Elsevier, vol. 106(C).
    3. Thomas Kittsteiner & Marion Ott & Richard Steinberg, 2022. "Competing Combinatorial Auctions," Information Systems Research, INFORMS, vol. 33(4), pages 1130-1137, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Roberto Burguet, 2000. "Auction theory: a guided tour," Investigaciones Economicas, Fundación SEPI, vol. 24(1), pages 3-50, January.
    2. Philippe Jehiel & Laurent Lamy, 2011. "Absolute auctions and secret reserve prices: Why are they used?," Levine's Working Paper Archive 786969000000000316, David K. Levine.
    3. Maslov, Alexander & Schwartz, Jesse A., 2022. "Imperfect competition in online auctions," Journal of Mathematical Economics, Elsevier, vol. 102(C).
    4. Hanzhe Zhang, 2021. "Prices versus auctions in large markets," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 72(4), pages 1297-1337, November.
    5. Roberto Burguet, 2004. "Optimal Procurement Auction for a Buyer with Downward Sloping Demand: More Simple Economics," Working Papers 2004.144, Fondazione Eni Enrico Mattei.
    6. Landi, Massimiliano & Menicucci, Domenico & Sarychev, Andrey, 2023. "Competing auctions with non-identical objects," Journal of Mathematical Economics, Elsevier, vol. 106(C).
    7. Itai Ashlagi & Dov Monderer & Moshe Tennenholtz, 2011. "Simultaneous Ad Auctions," Mathematics of Operations Research, INFORMS, vol. 36(1), pages 1-13, February.
    8. Schmitz, Patrick W., 2003. "On second-price auctions and imperfect competition," Journal of Mathematical Economics, Elsevier, vol. 39(8), pages 901-909, November.
    9. Ronald M. Harstad, 2007. "Does a Seller Really Want Another Bidder?," Working Papers 0711, Department of Economics, University of Missouri.
    10. Yongmin Chen & Ruqu Wang, 2004. "Equilibrium Selling Mechanisms," Annals of Economics and Finance, Society for AEF, vol. 5(2), pages 335-355, November.
    11. Axel Ockenfels & David Reiley & Abdolkarim Sadrieh, 2006. "Online Auctions," NBER Working Papers 12785, National Bureau of Economic Research, Inc.
    12. Attar, Andrea & Campioni, Eloisa & Piaser, Gwenaël, 2018. "On competing mechanisms under exclusive competition," Games and Economic Behavior, Elsevier, vol. 111(C), pages 1-15.
    13. Han, Seungjin, 2015. "Robust competitive auctions," Economics Letters, Elsevier, vol. 136(C), pages 207-210.
    14. Melvyn G. Coles & Jan Eeckhout, 2000. "Heterogeneity as a coordination device," Economics Working Papers 510, Department of Economics and Business, Universitat Pompeu Fabra.
    15. Melvyn G. Coles & Jan Eeckhout, "undated". "Efficient Job Allocation," Penn CARESS Working Papers f254df043aa954b9f2d76c248, Penn Economics Department.
    16. Attar, Andrea & Campioni, Eloisa & Piaser, Gwenaël, 2013. "Two-sided communication in competing mechanism games," Journal of Mathematical Economics, Elsevier, vol. 49(1), pages 62-70.
    17. Lester, Benjamin & Visschers, Ludo & Wolthoff, Ronald, 2017. "Competing with asking prices," Theoretical Economics, Econometric Society, vol. 12(2), May.
    18. Damian Damianov, 2012. "Seller competition by mechanism design," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 51(1), pages 105-137, September.
    19. Cristián Troncoso-Valverde, 2018. "Releasing information in private-value second-price auctions," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 65(3), pages 781-817, May.
    20. Hernando-Veciana, Angel, 2005. "Competition among auctioneers in large markets," Journal of Economic Theory, Elsevier, vol. 121(1), pages 107-127, March.

    More about this item

    Keywords

    Competition; English auction; Horizontal product differentiation; Reserve price;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:revind:v:33:y:2008:i:2:p:113-128. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.