Equivalence of Auctions and Posted Prices with Many Sellers in a Location

Klaus Kultti () and Juha Virrankoski ()
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Juha Virrankoski: Research Unit on Economic Structures and Growth, Department of Economics, University of Helsinki, Finland

Finnish Economic Papers, 2004, vol. 17, issue 2, 79-89

Abstract: We consider an economy with symmetric buyers and symmetric sellers. Sellers are in locations and post prices, and buyers observe the prices and visit one location per period. If there are several sellers in a location, a uniform price is not a Nash equilibrium. We derive a pricing scheme with a non-degenerate distribution of prices that is utilitywise the same as auction.

JEL-codes: C78 D40 D83 (search for similar items in EconPapers)
Date: 2004
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