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| Author: | Engelbrecht-Wiggans, R. |
| Title: | Auctions with noncompetitive sales |
| Journal: | Games and Economic Behavior
1996 : SEP, VOL. 16:1, p. 54-64 |
| Index terms: | COMPETITION SALES METHODS PRICE LEVEL |
| Language: | eng |
| Abstract: | We present a model of multiunit auctions in which some of the units may be sold before the auction (i.e., noncompetitively") at a price to be established by the auction. All potential buyers have similar information and costs. But, at equilibrium, some buy noncompetitively while the remainder bid in the auction, and the seller benefits from allowing noncompetitive sales. Each year, auctions publicly establish the prices for billions of dollars worth of goods. In many situations these established prices become the basis for further trading by individuals outside of the auction. For example, the prices established at widely observed art auctions influence the prices paid at nonauction sales of similar works. |
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