1 option
Buy-it-now or Take-a-chance: Price Discrimination through Randomized Auctions / L. Elisa Celis, Gregory Lewis, Markus M. Mobius, Hamid Nazerzadeh.
- Format:
- Book
- Author/Creator:
- Celis, L. Elisa.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w18590.
- NBER working paper series no. w18590
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2012.
- Summary:
- Increasingly detailed consumer information makes sophisticated price discrimination possible. At fine levels of aggregation, demand may not obey standard regularity conditions. We propose a new randomized sales mechanism for such environments. Bidders can "buy-it-now" at a posted price, or "take-a-chance" in an auction where the top d > 1 bidders are equally likely to win. The randomized allocation incentivizes high valuation bidders to buy-it-now. We analyze equilibrium behavior, and apply our analysis to advertiser bidding data from Microsoft Advertising Exchange. In counterfactual simulations, our mechanism increases revenue by 4.4% and consumer surplus by 14.5% compared to an optimal second-price auction.
- Notes:
- Print version record
- December 2012.
The Penn Libraries is committed to describing library materials using current, accurate, and responsible language. If you discover outdated or inaccurate language, please fill out this feedback form to report it and suggest alternative language.