Beckert, Walter (2005) Dynamic monopolies with stochastic demand. Working Paper. Birkbeck, University of London, London, UK.
|
Text
27106.pdf - Draft Version Download (443kB) | Preview |
Abstract
This paper analyses equilibria in sequential take-it-or-leave-it sales and sequential auctions when demand is stochastic. It is shown that equilibria in the former mechanism trade-off allocative efficiency and competing buyers' opportunities to acquire an item to be sold, permitting prices and expected revenue above those of one-shot offers. Hence Coase-type conjectures are invalid in this setting. Moreover, sequential take-it-or-leave-it sellers can achieve expected revenue in early periods in excess of those in sequential auctions, and, if sufficiently patient, higher expected revenue in the entire game than slightly less patient auction sellers. This provides one explanation why some goods are typically sold in take-it-or-leave-it deals, while others are sold in auctions. An asymptotic revenue equivalence result is shown to reconcile the two mechanisms as the time horizon of the dynamic game gets large.
Metadata
| Item Type: | Monograph (Working Paper) |
|---|---|
| Additional Information: | BWPEF 0404 |
| Keyword(s) / Subject(s): | Dynamic Monopoly, Stochastic Demand, Optimal Auctions, Coase Conjecture, Revenue Equivalence |
| School: | Birkbeck Faculties and Schools > Faculty of Business and Law > Birkbeck Business School |
| Depositing User: | Administrator |
| Date Deposited: | 09 Apr 2019 12:02 |
| Last Modified: | 02 Aug 2023 17:50 |
| URI: | https://eprints.bbk.ac.uk/id/eprint/27106 |
Statistics
Additional statistics are available via IRStats2.
Archive Staff Only (login required)
