Roberts and Sweeting Study "When Should Sellers Use Auctions?"

04 September 2012 9:20AM

New research by industrial organization specialists James Roberts and Andrew Sweeting has been accepted for publication. "When Should Sellers Use Auctions?" will be published in a forthcoming issue of the American Economic Review.

Following is the abstract of the paper:

A bidding process can be organized so that offers are submitted simultaneously or sequentially. In the latter case, potential buyers can condition their behavior on previous entrants' decisions. The relative performance of these mechanisms is investigated when entry is costly and selective, meaning that potential buyers with higher values are more likely to participate. A simple sequential mechanism can give both buyers and sellers significantly higher payoffs than the commonly used simultaneous bid auction. The findings are illustrated with parameters estimated from simultaneous entry USFS timber auctions where our estimates predict that the sequential mechanism would increase revenue and efficiency.

Read the full paper "When Should Sellers Use Auctions?"

Learn more about Professor Roberts and Professor Sweeting.