Auctions and Finite Posted Prices in Online Markets

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Maslov, Alexander




The thesis presents a model of a competing mechanism allowing buyers already engaged in an auction to decide whether to stay in it or buy an object from a posted price outside.

In the first chapter I describe the relevance of the studied problem to the real world online platforms and discuss how my research contributes to the existing literature. I analyze buyers' game and show that when the amount of goods outside is less than the number of buyers, the latter, with valuations higher than the posted price, prefer to leave the auction early and buy the good at the posted price.

In the second chapter I analyze seller's revenues and show that contrary to the models with effectively infinite goods offered at posted prices and auctions simultaneously, using mixed mechanism may not always be a profit maximizing strategy on markets with one seller and limited supply of goods. When there is competition among sellers, mixed mechanism is the equilibrium. However, sellers do not use it to discriminate between low- and high-valuation buyers as in the models for unlimited supply of goods, but rather as the best response to hedge against the price undercutting by another seller.

In the third chapter I present several extensions to the buyers' subgame equilibrium. I show that the timing of the decision to exit the auction early depends on the degree of risk aversion, number of bidders and the price outside. In addition, I show that the seller's revenues rise with buyers' risk aversion. Lastly, an increase in the number of buyers prompts the seller to use different selling mechanisms.


Economics - Theory




Carleton University

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Theses and Dissertations

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