Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/167984
Authors: 
Watts, Alison
Year of Publication: 
2016
Citation: 
[Journal:] Games [ISSN:] 2073-4336 [Volume:] 7 [Year:] 2016 [Issue:] 3 [Pages:] 1-14
Abstract: 
Buyer-seller networks where price is determined by an ascending-bid auction are important in many economic examples such as certain real estate markets, radio spectrum sharing, and buyer-supplier networks. However, it may be that some sellers are better off not participating in the auction. We consider what happens if sellers can make a take it or leave it offer to one of their linked buyers before the auction takes place and thus such a seller can choose not to participate in the auction. We give conditions on the graph and buyers valuations under which the buyer and seller will both agree to such a take it or leave it offer. Specifically, the buyer-seller pair will choose private negotiation over the auction if the seller acts as a network bridge with power over the buyer and if there are enough buyers with low valuations so that the seller does not expect to receive a high price in the auction.
Subjects: 
auctions
buyer-seller networks
bridges
JEL: 
C7
D44
D85
Persistent Identifier of the first edition: 
Creative Commons License: 
http://creativecommons.org/licenses/by/4.0/
Document Type: 
Article
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