Access

You are not currently logged in.

Access your personal account or get JSTOR access through your library or other institution:

login

Log in to your personal account or through your institution.

Auctions Versus Negotiations

Jeremy Bulow and Paul Klemperer
The American Economic Review
Vol. 86, No. 1 (Mar., 1996), pp. 180-194
Stable URL: http://www.jstor.org/stable/2118262
Page Count: 15
  • Download ($10.00)
  • Subscribe ($19.50)
  • Cite this Item
Auctions Versus Negotiations
Preview not available

Abstract

Which is the more profitable way to sell a company: an auction with no reserve price or an optimally-structured negotiation with one less bidder? We show under reasonable assumptions that the auction is always preferable when bidders' signals are independent. For affiliated signals, the result holds under certain restrictions on the seller's choice of negotiating mechanism. The result suggests that the value of negotiating skill is small relative to the value of additional competition. The paper also shows how the analogies between monopoly theory and auction theory can help derive new results in auction theory.

Page Thumbnails

  • Thumbnail: Page 
180
    180
  • Thumbnail: Page 
181
    181
  • Thumbnail: Page 
182
    182
  • Thumbnail: Page 
183
    183
  • Thumbnail: Page 
184
    184
  • Thumbnail: Page 
185
    185
  • Thumbnail: Page 
186
    186
  • Thumbnail: Page 
187
    187
  • Thumbnail: Page 
188
    188
  • Thumbnail: Page 
189
    189
  • Thumbnail: Page 
190
    190
  • Thumbnail: Page 
191
    191
  • Thumbnail: Page 
192
    192
  • Thumbnail: Page 
193
    193
  • Thumbnail: Page 
194
    194