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Risk, Reward and Uncertainty in Buyer-Seller Transactions

Author

Listed:
  • Radosveta Ivanova-Stenzel
  • Sabine Kröger

Abstract

– The Seller’s View on Combining Posted Prices and Auctions – In Buy-It-Now auctions, sellers can post a take-it-or-leave-it price offer prior to an auction. While the literature almost exclusively looks at buyers in such combined mechanisms, the current paper summarizes results from the sellers’ point of view. Buy-It-Now auctions are complex mechanisms and therefore quite challenging for sellers. The paper discusses the seller’s curse, a bias that sellers might fall prey to in such combined mechanisms, and how experience counterbalances this bias. Furthermore, the paper explores the role of information and bargaining power on behavior and profit prospects in Buy-It-Now auctions. – The Seller’s View on Combining Posted Prices and Auctions – Dans les enchères de type "Achat immédiat", les vendeurs peuvent publier une offre de prix à prendre ou à laisser avant l'enchère. Alors que la littérature s'intéresse presque exclusivement aux acheteurs dans ces mécanismes combinés, le présent document résume les résultats du point de vue des vendeurs. Les enchères de type "Achat immédiat" sont des mécanismes complexes et posent un grand défi pour les vendeurs. Dans l'article, nous traitons de la malédiction du vendeur, un biais dont les vendeurs peuvent être victimes dans ces mécanismes combinés. Nous présenterons également comment l'expérience que les vendeurs ont avec le mécanisme contrebalance ce biais. En outre, nous explorons le rôle de l'information et du pouvoir de négociation sur le comportement des vendeurs et leurs perspectives de profit dans les enchères de type "Achat immédiat".

Suggested Citation

  • Radosveta Ivanova-Stenzel & Sabine Kröger, 2023. "Risk, Reward and Uncertainty in Buyer-Seller Transactions," CIRANO Working Papers 2023s-13, CIRANO.
    • Handle: RePEc:cir:cirwor:2023s-13
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    File URL: https://cirano.qc.ca/files/publications/2023s-13.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    asymmetric information; laboratory experiment; field experiment; auction; BIN-auction; Buy-It-Now auction; BIN-price; Buy-It-Now price; combined mechanism; information asymétrique; expérience en laboratoire; expérience sur le terrain; enchère; enchère BIN; enchère Buy-It-Now; prix BIN; prix Buy-It-Now; mécanisme combiné; enchère de type Achat immédiat; prix Achat immédiat;
    All these keywords.

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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