Auctions versus private negotiations in buyer-seller networks

Artikel

Buyer-seller networks where price is determined by an ascending-bid auction are important in many economic examples such as certain real estate markets, radio spectrum sharing, and buyer-supplier networks. However, it may be that some sellers are better off not participating in the auction. We consider what happens if sellers can make a take it or leave it offer to one of their linked buyers before the auction takes place and thus such a seller can choose not to participate in the auction. We give conditions on the graph and buyers valuations under which the buyer and seller will both agree to such a take it or leave it offer. Specifically, the buyer-seller pair will choose private negotiation over the auction if the seller acts as a network bridge with power over the buyer and if there are enough buyers with low valuations so that the seller does not expect to receive a high price in the auction.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Games ; ISSN: 2073-4336 ; Volume: 7 ; Year: 2016 ; Issue: 3 ; Pages: 1-14 ; Basel: MDPI

Classification and Topics

• Classification: Wirtschaft ; Auctions ; Network Formation and Analysis: Theory
• Subject: auctions ; buyer-seller networks ; bridges

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Watts, Alison
• Event: Veröffentlichung
• (who): MDPI
• (where): Basel
• (when): 2016

Further information

• DOI: doi:10.3390/g7030022
• Handle: http://hdl.handle.net/10419/167984
• Last update: 10.03.2025, 11:44 AM CET