Auctioning horizontally differentiated items

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Title: Auctioning horizontally differentiated items
Authors: Parlane, Sarah
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Date: 8-Dec-2005
Online since: 2008-11-24T17:19:12Z
Abstract: This paper analyses strategic market allocation by two auctioneers holding substitutes. It characterizes both the cooperative and competitive outcomes. Under cooperation or competition with close substitutes, bidders are allocated according to the expected total surplus each generates. This market division is efficient if and only if the distribution of bidders' tastes is not skewed. If skewed, reserve prices distort participation towards the least preferred item. For greater degrees of product differentiation competition leads to multiple equilibria. Finally, competition with close substitutes sellers leave participation rents to their weakest bidder. They do not in other cases, whether they compete or cooperate.
Type of material: Working Paper
Publisher: University College Dublin. School Of Economics
Series/Report no.: UCD Centre for Economic Research Working Paper Series; WP05/25
Copyright (published version): 2005 School Of Economics, University College Dublin
Keywords: CompetitionAuctionsReserve pricesEfficiency
Subject LCSH: Auctions--Mathematical models
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Language: en
Status of Item: Not peer reviewed
Appears in Collections:Economics Working Papers & Policy Papers

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