Auctions with a buy price: The case of reference-dependent preferences

@article{Shunda2009AuctionsWA,
  title={Auctions with a buy price: The case of reference-dependent preferences},
  author={Nicholas Shunda},
  journal={Games and Economic Behavior},
  year={2009},
  volume={67},
  pages={645-664}
}
In an auction with a buy price, the seller provides bidders wi th an option to end the auction early by accepting a transaction at a posted p rice. The ”BuyIt-Now” option on eBay is a leading example of an auction with a buy price. This paper develops a model of an auction with a buy price in wh ich bidders use the auction’s reserve price and buy price to formulate a r eference price. The model both explains why a revenue-maximizing seller would w ant to augment her auction with a buy price and… CONTINUE READING
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