scholarly journals A Note on Buyers’ Behavior in Auctions with an Outside Option

Games ◽  
2020 ◽  
Vol 11 (3) ◽  
pp. 26
Author(s):  
Alexander Maslov
Keyword(s):  
Outside Option ◽  
Posted Prices

In this note I show that the equilibrium in cutoff strategies observed in auctions with a buy-it-now price may also arise in markets where objects are sold simultaneously by auctions and posted prices. However, contrary to auctions with a buy-it-now price where buyers need to know only the total number of players in the market, in the latter environment buyers must also observe the number of active bidders in the auction for the equilibrium to exist in cutoff strategies.

scholarly journals Asymmetric Opportunities After an Unsuccessful Sports Career

2021 ◽  
pp. 152700252199587
Author(s):  
Martin Grossmann
Keyword(s):  
Outside Option ◽  
Career Opportunities

Contestants enter a risky contest when pursuing a sports career or choose a secure outside option. If contestants enter this contest but their sports career fails, they may have asymmetric career opportunities outside of sport. Greater opportunities reduce the risk of entering this contest. However, contestants’ incentives to exert effort decrease. Two types of equilibria exist if the initial pool of contestants is large. Either only types with high opportunities or only types with low opportunities enter the sports contest. If the initial pool of contestants is low, both types of contestants participate in the contest.

Multidimensional Bargaining and Posted Prices

2021 ◽  
pp. 105317
Author(s):  
Martin Hagen ◽  
Ángel Hernando-Veciana
Keyword(s):  
Posted Prices

scholarly journals Beyond Posted Prices: The Past, Present, and Future of Participative Pricing Mechanisms

2017 ◽  
Author(s):  
Martin Spann ◽  
Robert Zeithammer ◽  
Marco Bertini ◽  
Ernan Haruvy ◽  
Sandy D. Jap ◽  
...  
Keyword(s):  
The Past ◽  
Participative Pricing ◽  
Posted Prices

Analyzing Alliance Treaty Negotiation Outcomes

2019 ◽  
pp. 64-106
Author(s):  
Paul Poast
Keyword(s):  
Selection Bias ◽  
Outside Option ◽  
Omitted Variable Bias ◽  
Suggestive Evidence ◽  
Treaty Negotiations ◽  
The Cross ◽  
Variable Bias

This chapter explores basic patterns in the data described in the previous chapter using cross tabulations. These tabulations show that having strategic and operational compatibility is strongly associated with a higher rate of agreement in alliance treaty negotiations. They also demonstrate that agreement can be reached, though less often, even between states that lack ideal war plan compatibility. The suggestive evidence offered by these cross tabulations is useful, but the cross tabulations also raise questions. While the initial patterns are supportive of this book's theory, the chapter is concerned about potential complications in the data that could undermine the ability to draw inferences about the relationships between variables. These potential complications include selection bias and omitted variable bias. The chapter then identifies how and under what conditions the existence of an outside option influences the outcome of alliance treaty negotiations.

Persuading Customers to Buy Early: The Value of Personalized Information Provisioning

2020 ◽  
Author(s):  
Kimon Drakopoulos ◽  
Shobhit Jain ◽  
Ramandeep Randhawa
Keyword(s):  
Revenue Management ◽  
Public Information ◽  
Product Availability ◽  
Ex Post ◽  
Posted Prices

We study a pricing and information provisioning game between a better-informed seller (such as a retailer) and its customers. The seller is (ex post) better informed about product availability and can choose how to communicate this information to the customers. The customers are heterogeneous in their valuation for the product. The firm optimizes on publicly posted prices (which are the same for all customers) and its information provisioning (which can be personalized). Using a Bayesian persuasion framework, we find that public information provisioning, in which the firm sends the same information to all customers, has limited value. However, personalized information provisioning, in which the firm can share different information with different customers, has significant value and has attributes very similar to personalized pricing. This paper was accepted by Gabriel Weintraub, revenue management and market analytics.

scholarly journals Partial Versus General Compulsory Solidarity: an Experimental Analysis

2019 ◽  
Vol 36 (3-4) ◽  
pp. 249-279
Author(s):  
Andrej Angelovski ◽  
Arianna Galliera ◽  
Werner Güth
Keyword(s):  
Experimental Analysis ◽  
Outside Option ◽  
Voluntary Contribution Mechanism ◽  
Voluntary Contribution

AbstractWe focus on ways and means of solidarity and their more or less voluntary and involuntary character. Alternative ways of redistribution are modeled by combining redistribution as emergent from a non-discriminatory voluntary contribution mechanism, VCM, with an outside option for a “super-rich”, R, participant to donate to VCM participants. The outsider may discriminate between participants of the VCM on the basis of information accessible at a cost to her. Inclusion in and exclusion from the VCM are involuntary while contributions in it are voluntary. How involuntary inclusion of R in VCM affects her discriminatory voluntary donations and contribution behavior is explored experimentally.

scholarly journals Menu Costs, Posted Prices, and Multiproduct Retailers

1999 ◽  
Vol 31 (4) ◽  
pp. 683 ◽  
Author(s):  
Shantanu Dutta ◽  
Mark Bergen ◽  
Daniel Levy ◽  
Robert Venable
Keyword(s):  
Menu Costs ◽  
Posted Prices

Third-Degree Price Discrimination with Buyer Power

2009 ◽  
Vol 9 (1) ◽  
Author(s):  
Roman Inderst ◽  
Tommaso Valletti
Keyword(s):  
Price Discrimination ◽  
Outside Option ◽  
Uniform Pricing ◽  
Outside Options ◽  
Buyer Power ◽  
Pricing Power

Abstract This paper introduces a model of third-degree price discrimination where a seller's pricing power is constrained by buyers' outside options. Price uniformity performs more efficiently than discriminatory pricing, as uniform pricing allows weaker buyers to exploit the more attractive outside option of stronger buyers. This mechanism is markedly different from the mechanisms that are at work in case uniform pricing is imposed on an unconstrained monopolist.

A Note on the Multidimensional Monopolist Problem and Intertemporal Price Discrimination

2010 ◽  
Vol 10 (1) ◽  
Author(s):  
Mariano G Runco
Keyword(s):  
Price Discrimination ◽  
Price Strategy ◽  
Incentive Compatible ◽  
Step Functions ◽  
Intertemporal Price Discrimination ◽  
Ex Ante ◽  
Posted Prices ◽  
Price Discriminate ◽  
Heterogeneous Consumers ◽  
Over Time

This note analyzes a model of a monopolist selling multiple goods to a continuum of heterogeneous consumers. The implementation of Direct Revelation Mechanisms is analyzed in that setting, finding that it is possible for the monopolist to implement all Stochastic Incentive Compatible Mechanisms by committing to post a decreasing sequence of prices. The posted prices depend on time and have the desirable property of being step functions. When the optimal mechanisms are stochastic, it is optimal for the monopolist to price discriminate over time, contrary to the conventional wisdom that a single-good monopolist committed to an ex-ante price strategy will not price discriminate.

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