Auctions with Frictions: Recruitment, Entry, and Limited Commitment

Stephan Lauermann () and Asher Wolinsky ()
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Stephan Lauermann: The University of Bonn, Department of Economics
Asher Wolinsky: Northwestern University, Department of Economics

No 288, ECONtribute Discussion Papers Series from University of Bonn and University of Cologne, Germany

Abstract: Auction models are convenient abstractions of informal price-formation processes that arise in markets for assets or services. These processes involve frictions such as bidder recruitment costs for sellers, participation costs for bidders, and limitations on sellers' commitment abilities. This paper develops an auction model that captures such frictions. We derive several novel predictions; in particular, we find that outcomes are often inefficient, and the market sometimes unravels.

Keywords: Auctions (search for similar items in EconPapers)
JEL-codes: D44 (search for similar items in EconPapers)
Pages: 52
Date: 2024-03
New Economics Papers: this item is included in nep-com, nep-des, nep-gth and nep-mic
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