Horizontal Product Differentiation in Auctions and Multilateral Negotiations

Charles Thomas and Bart Wilson

Working Papers from Chapman University, Economic Science Institute

Abstract: We experimentally compare first-price auctions and multilateral negotiations after introducing horizontal product differentiation into a standard procurement setting. The two institutions yield the buyer the same surplus, a difference from prior findings with homogeneous products that results from differentiation’s influence on the sellers’ pricing behavior. In particular, we find that introducing product differentiation intensifies price competition among the sellers in some treatments, and has no effect in others, which contrasts with the conventional wisdom that product differentiation softens competition.

Pages: 27 pages
Date: 2008
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Citations: View citations in EconPapers (3)

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http://www.chapman.edu/ESI/wp/Wilson_HorizontalDiff.pdf (application/pdf)

Related works:
Journal Article: Horizontal Product Differentiation in Auctions and Multilateral Negotiations (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:chu:wpaper:08-03

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