Economic Theory

, Volume 28, Issue 2, pp 449–452 | Cite as

A short proof of the Bulow-Klemperer auctions vs. negotiations result

Exposita Notes

Summary.

Bulow and Klemperer [1] have provided an upper bound on the value of bargaining power for a seller of an indivisible object. Specifically, negotiating optimally with N buyers yields lower revenue than an English auction with N + 1 buyers. In this paper, a short and intuitive proof of this result is presented.

Keywords and Phrases:

Auctions Negotiations Rationing. 

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Copyright information

© Springer-Verlag Berlin/Heidelberg 2006

Authors and Affiliations

  1. 1.Department of EconomicsBrock UniversitySt. CatharinesCANADA

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