Bargaining Versus Posted-Price: Evidence from eBay Motors

We study the informed‐principal problem in a bilateral asymmetric information trading setting with interdependent values and quasi‐linear utilities. The informed seller proposes a mechanism and voluntarily certifies information about the good's characteristics. When the set of certifiable statements is sufficiently rich, we show that there is an ex ante profit‐maximizing selling procedure that is an equilibrium of the mechanism proposal game. In contrast to posted price settings, the allocation obtained when product characteristics are commonly known (the unravelling outcome) may not be an equilibrium allocation, even when all buyer types agree on the ranking of product quality. Our analysis relies on the concept of strong Pareto optimal allocation, which was originally introduced by Maskin and Tirole (1990) in private value environments.

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Posted price selling and online auctions

Games and Economic Behavior ◽

10.1016/j.geb.2014.11.005 ◽

2015 ◽

Vol 90 ◽

pp. 81-92 ◽

Cited By ~ 4

Author(s):

Sajid Anwar ◽

Mingli Zheng

Keyword(s):

Online Auctions ◽

Posted Price

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The Cyclicality of Sales, Regular and Effective Prices: Business Cycle and Policy Implications: Reply

The American Economic Review ◽

10.1257/aer.20171338 ◽

2019 ◽

Vol 109 (1) ◽

pp. 314-324 ◽

Cited By ~ 1

Author(s):

Olivier Coibion ◽

Yuriy Gorodnichenko ◽

Gee Hee Hong

Keyword(s):

Business Cycle ◽

Policy Implications ◽

Price Inflation ◽

Weighting Schemes ◽

Wide Variability ◽

Posted Price

We address how using different censoring thresholds and imputation procedures affects the baseline results of Coibion, Gorodnichenko, and Hong (2015). Higher censoring thresholds introduce measure ment error and outliers that generate wide variability in results across weighting schemes, but methods that explicitly control for outliers confirm the results of Coibion, Gorodnichenko, and Hong (2015) for all censoring thresholds. We also illustrate how the BLS’s approach to imputing missing prices can introduce a cyclical bias into measures of posted price inflation when store-switching is present in the data. (JEL D12, E31, E32, L25, L81)

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