Risk, Reward and Uncertainty in Buyer-Seller Transactions - The Seller's View on Combining Posted Prices and Auctions -

Ivanova-Stenzel, Radosveta and Kröger, Sabine (14. February 2023): Risk, Reward and Uncertainty in Buyer-Seller Transactions - The Seller's View on Combining Posted Prices and Auctions -. Collaborative Research Center Transregio 190, Discussion Paper No. 382

Abstract

In Buy-It-Now auctions, sellers can post a take-it-or-leave-it price offer prior to an auction. While the literature almost exclusively looks at buyers in such combined mechanisms, the current paper summarizes results from the sellers' point of view. Buy-It-Now auctions are complex mechanisms and therefore quite challenging for sellers. The paper discusses the seller's curse, a bias that sellers might fall prey to in such combined mechanisms, and how experience counterbalances this bias. Furthermore, the paper explores the role of information and bargaining power on behavior and profit prospects in Buy-It-Now auctions.

• Item Type: Paper
• Keywords: asymmetric information; laboratory experiment; field experiment; auction; BIN-auction; Buy-It-Now auction; BIN-price; Buy-It-Now price; combined mechanism
• Faculties: Economics > Collaborative Research Center Transregio "Rationality and Competition"
• Subjects: 300 Social sciences > 330 Economics
• JEL Classification: C72, C91, D44, D82, L1
• Language: English