This paper shows that larger auctions are more efficient than smaller ones, but that despite this scale effect, two competing and otherwise identical markets or auction sites of different sizes can coexist in equilibrium. We find that the range of equilibrium market sizes depends on the aggregate buyer-seller ratio, and also whether the markets are especially thin. (JEL: D44, L11) Copyright (c) 2004 by the European Economic Association.
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Volume (Year): 2 (2004)
Issue (Month): 1 (03)
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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Tymon Tatur, 2000. "Asymptotically Optimal Market Mechanisms," Discussion Papers 1315, Northwestern University, Center for Mathematical Studies in Economics and Management Science, revised Jan 2001.
- Michael Peters & Sergei Severinov, 1995.
"Competition Among Sellers who offer Auctions Instead of Prices,"
peters-95-02, University of Toronto, Department of Economics.
- 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.
- Gresik, Thomas A. & Satterthwaite, Mark A., 1989. "The rate at which a simple market converges to efficiency as the number of traders increases: An asymptotic result for optimal trading mechanisms," Journal of Economic Theory, Elsevier, vol. 48(1), pages 304-332, June.
- Caillaud, Bernard & Jullien, Bruno, 2001. "Competing cybermediaries," European Economic Review, Elsevier, vol. 45(4-6), pages 797-808, May.
- Gehrig, Thomas, 1998. "Competing markets," European Economic Review, Elsevier, vol. 42(2), pages 277-310, February.
- 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 231-47, February.
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