It ain’t over until it’s over: English auctions with subsequent negotiations

Onur Koska and Frank Stähler

International Review of Economics & Finance, 2021, vol. 72, issue C, 121-124

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)
Date: 2021
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Working Paper: It Ain’t Over Until It’s Over: English Auctions with Subsequent Negotiations (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:72:y:2021:i:c:p:121-124

DOI: 10.1016/j.iref.2020.11.010

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