Auctions with Frictions: Recruitment, Entry, and Limited Commitment

Stephan Lauermann () and Asher Wolinsky ()

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

Abstract: Auction models are convenient abstractions of informal price formation processes that arise in markets for assets or services. These processes involve frictions such as bidder recruitment costs for sellers, participation costs for bidders, and limitations on sellers commitment abilities. This paper develops an auction model that captures such frictions. We derive several novel predictions; in particular, we find that outcomes are often inefficient, and the market sometimes unravels.

Keywords: Auctions (search for similar items in EconPapers)
JEL-codes: D44 (search for similar items in EconPapers)
Pages: 51
Date: 2024-03
New Economics Papers: this item is included in nep-com, nep-des and nep-gth
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