When Should Sellers Use Auctions?
AbstractA bidding process can be organized so that offers are submitted simultaneously or sequentially. In the latter case, potential buyers can condition their behavior on previous entrants' decisions. The relative performance of these mechanisms is investigated when entry is costly and selective, meaning that potential buyers with higher values are more likely to participate. A simple sequential mechanism can give both buyers and sellers significantly higher payoffs than the commonly used simultaneous bid auction. The findings are illustrated with parameters estimated from simultaneous entry USFS timber auctions where our estimates predict that the sequential mechanism would increase revenue and efficiency.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 17624.
Date of creation: Nov 2011
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Publication status: published as “When Should Sellers Use Auctions?” (with Andrew Sweeting). American Economic Review, 103(5) 2013.
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- D04 - Microeconomics - - General - - - Microeconomic Policy: Formulation; Implementation; Evaluation
- L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
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- NEP-ALL-2011-12-13 (All new papers)
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