Unilateral and Exclusionary/Strategic Effects of Common Agency: Price Impacts in a Repeated Common Value English Auction

The business justification for multiple principals to hire a common agent is efficiency. Our empirical study demonstrates that the creation of the common agent unilaterally depresses winning bids. Additionally, the common agent was not only observed to be the dominant bidder but also paid significantly lower prices than fringe competitors (price/quantity differential). The observed price/quantity differential is consistent with the almost common value English auction theory developed by Rose and Kagel (2008) in which a cost advantaged bidder is able to reduce competition by credibly raising the costs of disadvantaged rivals associated with the winner’s curse.


Issue Date:
2010
Publication Type:
Conference Paper/ Presentation
PURL Identifier:
http://purl.umn.edu/56529
Total Pages:
54
JEL Codes:
D44; K21; K23
Series Statement:
Selected Paper




 Record created 2017-04-01, last modified 2017-08-25

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