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- Title
ALL‐PAY AUCTIONS WITH A BUY‐PRICE OPTION.
- Authors
Xu, Minbo; Li, Sanxi; Yan, Jianye
- Abstract
This paper studies all‐pay auctions in which there is a buy‐price option for bidders to guarantee purchases at a seller‐specified price. We analyze symmetric increasing bidding equilibria in the first‐ and second‐price all‐pay auctions with the buy‐price option. While the optimal buy‐price in the second price is higher than are those in the first‐price all‐pay auction, both formats maintain the same expected profit. With an endogenous entry process, all‐pay auctions with the buy‐price can attract more consumers and ultimately reach a higher expected profit than does the uniform posted‐price selling mechanism.
- Subjects
BIDDERS; BID price; PURCHASING agents; ECONOMIC competition; ECONOMIC equilibrium
- Publication
Economic Inquiry, 2019, Vol 57, Issue 1, p617
- ISSN
0095-2583
- Publication type
Article
- DOI
10.1111/ecin.12585