Working Paper: CEPR ID: DP3774
Authors: Patrick Schmitz
Abstract: Consider two sellers each of whom has one unit of an indivisible good and two buyers each of whom is interested in buying one unit. The sellers simultaneously set reserve prices and use second price auctions as rationing device. An equilibrium in pure strategies where each sellers has a regular customer is characterized. The result is applied in order to demonstrate that not allowing sellers to use second price auctions may enhance total surplus.
Keywords: auctions; duopoly; private information; selling mechanisms
JEL Codes: D43; D44; D82
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Seller competition (D41) | Buyer behavior (D12) |
| Seller competition (D41) | Welfare outcomes (I38) |
| Sellers' auction mechanism (D44) | Total surplus (D69) |
| Sellers' ability to price discriminate (D40) | Total surplus (D69) |