Managing Strategic Buyers

Johannes Hörner and Larry Samuelson

Journal of Political Economy, 2011, vol. 119, issue 3, 379 - 425

Abstract: We consider the problem of a monopolist who must sell her inventory before some deadline, facing buyers with independent private values. The seller faces a basic trade-off between imperfect price discrimination and maintaining an effective reserve price. When there is only one unit and only a few buyers, the seller essentially posts unacceptable prices up to the very end, at which point prices collapse in a series of jumps to a "reserve price" exceeding marginal cost. When there are many buyers, the seller abandons this reserve price in order to more effectively screen buyers, with prices decreasing continuously over time.

Date: 2011
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Related works:
Working Paper: Managing Strategic Buyers (2011)
Working Paper: Managing Strategic Buyers (2010)
Working Paper: Managing Strategic Buyers (2010)
Working Paper: Managing Strategic Buyers (2009)
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