Optimal Sales Schemes against Interdependent Buyers

Optimal Sales Schemes against Interdependent Buyers

Under the optimal scheme identified in Theorem 2, the response by each buyer moves in the direction of the response dominant among their predecessors. In other words, a buyer accepts with a higher probability than his predecessor when most buyers before him have chosen to accept, and rejects with a higher probability when most buyers before him have chosen to reject. Formally, the following pro...

Revenue Optimization against Strategic Buyers

We present a revenue optimization algorithm for posted-price auctions when facing a buyer with random valuations who seeks to optimize his -discounted surplus. In order to analyze this problem we introduce the notion of ✏-strategic buyer, a more natural notion of strategic behavior than what has been considered in the past. We improve upon the previous state-of-the-art and achieve an optimal re...

Are Home Buyers Myopic? Evidence From Housing Sales

This paper explores whether home buyers are myopic about future energy costs. I exploit variation in energy costs in the form of fuel price changes in Massachusetts where there is significant overlap in the geographic and age distributions of oil-heated homes and gas-heated homes. I find that relative fuel price shifts cause relative changes in housing transaction prices that are consistent wit...

Optimal auctions with financially constrained buyers

• 1 item and N bidders • private valuations: vi ∈ {ǫ, 2ǫ, . . . ,mǫ} • private budgets: bi st b1 < b2 < · · · < bk • private types: t = (v, b) • type distribution: t ∼ π density function: fb(v) distribution function: Fb(v) • monotone hazard rate: (v, b) ≥ (v, b) → 1−Fb(v) fb(v) ≥ 1−Fb′ (v ) f b′ (v ′) • direct mechanism: M = (a, p) allocation probability a(t) (expected) payment p(t) Assumptions...

Optimal Sterilization Policies in Interdependent Economies