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  • Open Daily: 10am - 10pm
    Alley-side Pickup: 10am - 7pm

    3038 Hennepin Ave Minneapolis, MN
    612-822-4611

Open Daily: 10am - 10pm | Alley-side Pickup: 10am - 7pm
3038 Hennepin Ave Minneapolis, MN
612-822-4611
A Comparison of Auctions and Multilateral Negotiations

A Comparison of Auctions and Multilateral Negotiations

Federal Trade Commission

Paperback

Business General

ISBN10: 1502365464
ISBN13: 9781502365460
Publisher: Createspace
Published: Sep 14 2014
Pages: 42
Weight: 0.27
Height: 0.11 Width: 8.50 Depth: 11.00
Language: English
We compare the well-known first-price auction with a common but previously unexamined exchange process that we term multilateral negotiations. In multilateral negotiations, a buyer solicits price offers for a homogeneous product from sellers with heterogeneous costs, and then plays the sellers off one another to obtain additional price concessions. Using experimental methods, we find that transaction prices are statistically indistinguishable in the two institutions with a sufficiently large number of sellers, but that prices are higher in multilateral negotiations than in first-price auctions as the number of sellers decreases. With fewer sellers, the institutions are equally efficient, but with more sellers, there is some evidence that multilateral negotiations are slightly more efficient.

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