Selling Procedures with Private Information and Common Values

The seller posted-price procedure is probably the most common method for making transactions in modern economies. We analyze the performance of posted pricing for transactions having significant common-value elements. In a model of two-sided private information, we characterize the fully revealing, perfect equilibrium offer strategy of the seller. We also characterize equilibrium behavior under two other pricing procedures—a sealed-bid procedure and a direct revelation mechanism. Finally, we examine the efficiency of these procedures and show that as the degree of common values increases, fewer mutually beneficial agreements are attained.

• 저널Management Science · 42(2) · 220–231
• 토픽Auction Theory and Applications · Management Science and Operations Research
• DOI10.1287/mnsc.42.2.220
• 저자John H. Lindsey, William Samuelson, Richard Zeckhauser