Auctions versus Posted-Price Selling

Ruqu Wang ()

American Economic Review, 1993, vol. 83, issue 4, 838-51

Abstract: Two popular selling methods--posted-price selling and auctions--are compared here in an independent private-values model. Without auctioning costs, auctioning is always optimal. When auctioning is costly, auctions are still preferable if the marginal-revenue curve is sufficiently steep. The global steepness of the marginal-revenue curve is found to coincide with the dispersion around the mean for a number of standard distributions. Finally, the prices of the monopoly seller and of the social optimum are compared. Copyright 1993 by American Economic Association.

Date: 1993
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Working Paper: Auctions Versus Posted-Price Selling (1991)
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