Merging Auction Houses

نویسندگان

  • Ricardo Ungo
  • Jesse A. Schwartz
چکیده

In this paper, we study the incentives for market concentration of (online and traditional) auction houses. Would sellers and buyers be better off if two separate auction houses merged? We suppose that each auction house has a separate clientele of sellers and buyers. Sellers value their (identical) units at 0, while buyers have independent private values. Each auction house uses an ascending auction or by revenue equivalence any auction mechanism that allocates units efficiently among those buyers at that auction house. If no buyers are lost upon the merger, we find that efficiency gains increase, but that the expected sellers’ revenue increases by more than the efficiency gains, leaving the buyers worse off. This result extends Bulow and Klemperer’s (1996) insight that the competition of an additional bidder increases auction revenue by more than the ability to commit to an optimal auction with one less bidder; in our model, the extra competition created by having all of the bidders bid against each other after the merger more than offsets any supply effects. With an example, we show that if buyers choose whether to participate or not, it is possible upon a merger that so many buyers are lost, the sellers are actually worse off. We conclude that without transfers from sellers to buyers, the merger may or may not be profitable for sellers. We thank Andy Daughety, Luke Froeb, Han Hong, Mike Peters, Jennifer Reinganum, Mike Shor, Quan Wen, and John Weymark for helpful comments. Assistant Professor, Department of Economics, Vanderbilt University, VU Station B #351819, 2301 Vanderbilt Place, Nashville, TN 37235-1819; jesse.schwartz@vanderbilt.edu. Ph.D. Candidate, Department of Economics, Vanderbilt University, VU Station B #351819, 2301 Vanderbilt Place, Nashville, TN 37235-1819; ricardo.ungo@vanderbilt.edu.

برای دانلود متن کامل این مقاله و بیش از 32 میلیون مقاله دیگر ابتدا ثبت نام کنید

ثبت نام

اگر عضو سایت هستید لطفا وارد حساب کاربری خود شوید

منابع مشابه

The Performance of Auction Houses

It has been observed that similar prints can obtain quite different prices at different auctions within the same auction period. Previous works applying hedonic price technique to determine the formation of auction prices of objects of art have found no conclusive result about the impact of auction houses on final prices. In these studies the object of art has been the unit, and influence of au...

متن کامل

Selling Picasso Paintings: the Efficiency of Auction Houses

Previous works applying hedonic price technique to determine the formation of auction prices of objects of art have found no conclusive result about the impact of auction houses on final prices. In these studies the object of art has been the unit, and influence of auction houses is analysed by testing whether auction house impact on price is significant or not within a framework of central ten...

متن کامل

Competition between auction houses: a shill bidding perspective

We analyze the competition between auction houses to organize an English auction in the independent private value model with participation costs when the seller is unable to commit not to participate in the same way as any potential buyer through a shill bidding activity. The seller may prefer to contract with auction houses with higher fees since they make the shill bidding activity more costl...

متن کامل

The Design of the Multi-Attribute English Auction with a Deadline Vs. the eBay Auction Protocol1

This paper provides an optimal auction mechanism design for automated agents conducting auctions, for example, auction houses on the web. In particular, we consider auction protocols that include two major features; multi-attribute items and a deadline rule. Three different protocols were analyzed. For each protocol a mechanism was developed that enables the auctioneer agent to compose an optim...

متن کامل

German Wine Auctions: A Marketing Tool for Differentiated Products?

The Prädikat Wine Estates (VDP), a German wine producer organization, representing about 200 wine estates and about 3 percent of wine grape area in Germany, holds a number of regional wine auctions every year. They differ from those auctions held through regular auction houses, because while at the regular auction houses private and corporate owners sell older, collectible wines, the VDP auctio...

متن کامل

ذخیره در منابع من


  با ذخیره ی این منبع در منابع من، دسترسی به آن را برای استفاده های بعدی آسان تر کنید

برای دانلود متن کامل این مقاله و بیش از 32 میلیون مقاله دیگر ابتدا ثبت نام کنید

ثبت نام

اگر عضو سایت هستید لطفا وارد حساب کاربری خود شوید

عنوان ژورنال:

دوره   شماره 

صفحات  -

تاریخ انتشار 2002