Auctions Versus Private Negotiations in Buyer-Seller Networks
AbstractBuyer-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. View Full-Text
Share & Cite This Article
Watts, A. Auctions Versus Private Negotiations in Buyer-Seller Networks. Games 2016, 7, 22.
Watts A. Auctions Versus Private Negotiations in Buyer-Seller Networks. Games. 2016; 7(3):22.Chicago/Turabian Style
Watts, Alison. 2016. "Auctions Versus Private Negotiations in Buyer-Seller Networks." Games 7, no. 3: 22.
Note that from the first issue of 2016, MDPI journals use article numbers instead of page numbers. See further details here.