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A short proof of the Bulow-Klemperer auctions vs. negotiations result

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  • René Kirkegaard

Abstract

Bulow and Klemperer [1] have provided an upper bound on the value of bargaining power for a seller of an indivisible object. Specifically, negotiating optimally with N buyers yields lower revenue than an English auction with N + 1 buyers. In this paper, a short and intuitive proof of this result is presented. Copyright Springer-Verlag Berlin/Heidelberg 2006

Suggested Citation

  • René Kirkegaard, 2006. "A short proof of the Bulow-Klemperer auctions vs. negotiations result," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 28(2), pages 449-452, June.
    • Handle: RePEc:spr:joecth:v:28:y:2006:i:2:p:449-452
    DOI: 10.1007/s00199-004-0593-2
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    Cited by:

    1. Chira, Inga & Volkov, Nikanor, 2017. "The choice of sale method and its consequences in mergers and acquisitions," The Quarterly Review of Economics and Finance, Elsevier, vol. 63(C), pages 170-184.
    2. Kirkegaard, René & Overgaard, Per Baltzer, 2008. "Pre-auction offers in asymmetric first-price and second-price auctions," Games and Economic Behavior, Elsevier, vol. 63(1), pages 145-165, May.
    3. Ivanova-Stenzel, Radosveta & Kröger, Sabine, 2008. "Price formation in a sequential selling mechanism," Journal of Economic Behavior & Organization, Elsevier, vol. 67(3-4), pages 832-843, September.
    4. Bergemann, Dirk & Brooks, Benjamin & Morris, Stephen, 2020. "Countering the winner's curse: optimal auction design in a common value model," Theoretical Economics, Econometric Society, vol. 15(4), November.
    5. Cheng, Harrison, 2015. "Participation and exclusion in auctions," Economics Letters, Elsevier, vol. 129(C), pages 77-80.
    6. Ivanova-Stenzel, Radosveta & Grebe, Tim & Kröger, Sabine, 2019. "How do sellers benefit from Buy-It-Now prices in eBay auctions?," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203606, Verein für Socialpolitik / German Economic Association.
    7. Tim Grebe & Radosveta Ivanova-Stenzel & Sabine Kröger, 2009. "Buy-it-Now Prices in eBay Auctions-The Field in the Lab," Cahiers de recherche 0950, CIRPEE.
    8. Tim Roughgarden & Inbal Talgam-Cohen & Qiqi Yan, 2019. "Robust Auctions for Revenue via Enhanced Competition," Operations Research, INFORMS, vol. 68(4), pages 1074-1094, July.
    9. Grebe, Tim & Ivanova-Stenzel, Radosveta & Kröger, Sabine, 2021. "How do sellers benefit from Buy-It-Now prices in eBay auctions?," Journal of Economic Behavior & Organization, Elsevier, vol. 183(C), pages 189-205.

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