It Ain’t Over Until It’s Over: English Auctions with Subsequent Negotiations

Onur Koska and Frank Stähler

Working Papers in Economics from University of Canterbury, Department of Economics and Finance

Abstract: We consider a standard private value ascending-bid auction and show that subsequent negotiations make a seller worse off. The reason is that the seller’s optimal strategy does not change if she can make a take-it-or-leave-it offer to the highest bidder after the auction. Consequently, her expected revenues do not increase with subsequent negotiations, but decrease if the highest bidder has some bargaining power.

Keywords: English auction; negotiations; reserve prices (search for similar items in EconPapers)
JEL-codes: D44 (search for similar items in EconPapers)
Pages: 7 pages
Date: 2020-03-01
New Economics Papers: this item is included in nep-des, nep-gth and nep-mic
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https://repec.canterbury.ac.nz/cbt/econwp/2004.pdf (application/pdf)

Related works:
Journal Article: It ain’t over until it’s over: English auctions with subsequent negotiations (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:cbt:econwp:20/04

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