Journal of Political Economy Vol. 119 No. 3 2011
Managing Strategic Buyers
Abstract
We consider the problem of a monopolist who must sell her inventory before some deadline, facing buyers with independent private values. The seller faces a basic trade-off between imperfect price discrimination and maintaining an effective reserve price. When there is only one unit and only a few buyers, the seller essentially posts unacceptable prices up to the very end, at which point prices collapse in a series of jumps to a “reserve price” exceeding marginal cost. When there are many buyers, the seller abandons this reserve price in order to more effectively screen buyers, with prices decreasing continuously over time.
- DOI
- 10.1086/660902
- Volume
- 119
- Issue
- 3
- Pages
- 379-425
- Language
- en
- Sources
- bibtex:phds-export.bib openalex crossref