LOGIN TO YOUR ACCOUNT

Username
Password
Remember Me
Or use your Academic/Social account:

CREATE AN ACCOUNT

Or use your Academic/Social account:

Congratulations!

You have just completed your registration at OpenAire.

Before you can login to the site, you will need to activate your account. An e-mail will be sent to you with the proper instructions.

Important!

Please note that this site is currently undergoing Beta testing.
Any new content you create is not guaranteed to be present to the final version of the site upon release.

Thank you for your patience,
OpenAire Dev Team.

Close This Message

CREATE AN ACCOUNT

Name:
Username:
Password:
Verify Password:
E-mail:
Verify E-mail:
*All Fields Are Required.
Please Verify You Are Human:
fbtwitterlinkedinvimeoflicker grey 14rssslideshare1
Publisher: Springer
Languages: English
Types: Article
Subjects: ems
We characterize the optimal selling mechanism for a seller who faces demand demarcated by a high and a low end and who can access an (online) auction site (by paying an access cost) in addition to using his own store that can be used as a posted price selling venue. We first solve for the optimal mechanism of a direct revelation game in which there is no venue-restriction constraint. We find that the direct optimal mechanism must necessarily incorporate a certain kind of pooling. We then show that even with the venue constraint, the seller can use a two stage indirect mechanism that implements the allocation rule from the optimal direct mechanism, and uses the venues in an optimal fashion. The first stage of the indirect mechanism is a posted price at the store. If the object is not sold, we move to stage two, which involves an auction at the auction site. A feature of this auction is a buy-now option which is essential for implementing the pooling feature of the optimal direct mechanism. We also show that the buy-now option in the optimal mechanism is of a “temporary” variety, and that a “permanent” buy-now option, in contrast, cannot implement the optimal mechanism. Auctions with a temporary buy-now option are in widespread use on eBay.
  • The results below are discovered through our pilot algorithms. Let us know how we are doing!

    • Bose, S., and A. Daripa (2007): “Optimal Sale: Auctions with a Buy Now Option,” Working Paper.
    • Budish, E. B., and L. N. Takeyama (2001): “Buy Prices in Online Auctions: Irrationality on the Internet?,” Economics Letters, 72, 325-333.
    • Bulow, J., and J. Roberts (1989): “The Simple Economics of Optimal Auctions,” Journal of Political Economy, 97, 1060-90.
    • Deltas, G. (2002): “Determining damages from the operation of bidding rings: An analysis of the post-auction knockout sale,” Economic Theory, 19, 243-269.
    • Hidv´egi, Z., W. Wang, and A. B. Whinston (2006): “Buy Price English Auction,” Journal of Economic Theory, 129(1), 31-52.
    • Holt, C. A. (1980): “Competitive Bidding for Contracts under Alternative Auction Procedures,” Journal of Political Economy, 88(3), 433-445.
    • Lucking-Reiley, D. (2000): “Auctions on the Internet: What's being auctioned, and how?,” Journal of Industrial Economics, 48(3), 227-252.
    • Maskin, E. S., and J. G. Riley (1984): “Optimal Auctions with Risk Averse Buyers,” Econometrica, 52, 1473-1518.
    • Mathews, T., and B. Katzman (2006): “The role of varying risk attitudes in an auction with a buyout option,” Economic Theory, 27(3), 597-613.
    • Matthews, S. (1983): “Selling to Risk Averse Buyers with Unobservable Tastes,” Journal of Economic Theory, 30, 370-400.
    • Milgrom, P. (2004): Putting auction theory to work, chapter 6.2.2.3. Cambridge University Press.
    • Milgrom, P., and I. Segal (2002): “Envelope Theorems for Arbitrary Choice Sets,” Econometrica, 70(2), 583-601.
    • Miller, M. (2005): Making a Living from Your eBay Business. Que, www.quepublishing.com.
    • Myerson, R. (1981): “Optimal Auctions,” Mathematics of Operations Research, 6, 58- 63.
    • Reynolds, S. S., and J. Wooders (2008): “Auctions with a Buy Price,” Economic Theory, This issue.
  • No related research data.
  • Discovered through pilot similarity algorithms. Send us your feedback.

Share - Bookmark

Cite this article