On the incidence of commissions in auction markets

Victor Ginsburgh, Patrick Legros and Nicolas Sahuguet

No 2010-009, Working Papers ECARES from ULB -- Universite Libre de Bruxelles

Abstract: We analyze the welfare consequences of an increase in the commissions charged by intermediaries in auction markets. Commissions are similar to taxes imposed on buyers and sellers, and standard economics suggests that both sellers and buyers are made worse off by the tax. However, we show that when the buyers’ participation constraint binds and when sellers set optimal reservation prices, the level of commissions correlates participation and reservation prices in such a way that participating buyers strictly gain from higher commissions.

Keywords: auction; intermediation; commissions; welfare (search for similar items in EconPapers)
Pages: 16 p.
Date: 2010-09
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Published by:

Downloads: (external link)
https://dipot.ulb.ac.be/dspace/bitstream/2013/2308 ... T-ontheincidence.pdf Œuvre complète ou partie de l'œuvre (application/pdf)

Related works:
Journal Article: On the incidence of commissions in auction markets (2010)
Working Paper: On the incidence of commissions in auction markets (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eca:wpaper:2013/230861

Ordering information: This working paper can be ordered from
http://hdl.handle.ne ... lb.ac.be:2013/230861

Access Statistics for this paper

More papers in Working Papers ECARES from ULB -- Universite Libre de Bruxelles Contact information at EDIRC.
Bibliographic data for series maintained by Benoit Pauwels ().