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.
Volume (Year): 2 (2004)
Issue (Month): 1 (03)
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- Michael Peters & Sergei Severinov, 1995.
"Competition Among Sellers who offer Auctions Instead of Prices,"
peters-95-02, University of Toronto, Department of Economics.
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