Auctioning Horizontally Differentiated Items

Auctioning Horizontally Differentiated Items This paper analyzes competition between two sellers that offer horizontally differentiated items at competing auctions. Three possible outcomes can arise in equilibrium. For substantially differentiated items the monopoly reserve prices form an equilibrium, and the market is not entirely covered. When products become closer substitutes, a non-empty interval of types becomes valuable to both sellers. When transport costs are low, and virtual valuations are high, sellers compete for these bidders and set their reserve prices below the valuation of the marginal bidder. In equilibrium all types enjoy participation rents. For intermediate levels of transport costs it is not worth competing for runaway bidders. In this case, there is a continuum of equilibria. In each equilibrium sellers adjust their reserve prices so that the marginal bidder gets no rents. Review of Industrial Organization Springer Journals

Auctioning Horizontally Differentiated Items

Loading next page...
Springer US
Copyright © 2008 by Springer Science+Business Media, LLC.
Economics; Industrial Organization; Microeconomics
Publisher site
See Article on Publisher Site


You’re reading a free preview. Subscribe to read the entire article.

DeepDyve is your
personal research library

It’s your single place to instantly
discover and read the research
that matters to you.

Enjoy affordable access to
over 12 million articles from more than
10,000 peer-reviewed journals.

All for just $49/month

Explore the DeepDyve Library

Unlimited reading

Read as many articles as you need. Full articles with original layout, charts and figures. Read online, from anywhere.

Stay up to date

Keep up with your field with Personalized Recommendations and Follow Journals to get automatic updates.

Organize your research

It’s easy to organize your research with our built-in tools.

Your journals are on DeepDyve

Read from thousands of the leading scholarly journals from SpringerNature, Elsevier, Wiley-Blackwell, Oxford University Press and more.

All the latest content is available, no embargo periods.

See the journals in your area

Monthly Plan

  • Read unlimited articles
  • Personalized recommendations
  • No expiration
  • Print 20 pages per month
  • 20% off on PDF purchases
  • Organize your research
  • Get updates on your journals and topic searches


Start Free Trial

14-day Free Trial

Best Deal — 39% off

Annual Plan

  • All the features of the Professional Plan, but for 39% off!
  • Billed annually
  • No expiration
  • For the normal price of 10 articles elsewhere, you get one full year of unlimited access to articles.



billed annually
Start Free Trial

14-day Free Trial