Selling to the Mean

Arbeitspapier

We study optimal selling strategies of a seller who is poorly informed about the buyer’s value for the object. When the maxmin seller only knows that the mean of the distribution of the buyer’s valuations belongs to some interval then nature can keep him to payoff zero no matter how much information the seller has about the mean. However, when the seller has information about the mean and the variance, or the mean and the upper bound of the support, the seller optimally commits to a randomization over prices and obtains a strictly positive payoff. In such a case additional information about the mean and/or the variance affects his payoff.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 5443

Classification and Topics

• Classification: Wirtschaft ; Noncooperative Games ; Auctions ; Asymmetric and Private Information; Mechanism Design
• Subject: optimal mechanism design ; robustness ; incentive compatibility ; individual rationality ; ambiguity aversion

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Kos, Nenad ; Messner, Matthias
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2015

Further information

• Handle: http://hdl.handle.net/10419/113779
• Last update: 10.03.2025, 11:43 AM CET