NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

NBER Working Papers by Bradley Larsen

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Working Papers

August 2014The Efficiency of Real-World Bargaining: Evidence from Wholesale Used-Auto Auctions
w20431
This study quantifies the efficiency of a real-world bargaining game with two-sided incomplete information. Myerson and Satterthwaite (1983) and Williams (1987) derived the theoretical efficient frontier for bilateral trade under two-sided uncertainty, but little is known about how well real-world bargaining performs relative to the frontier. The setting is wholesale used-auto auctions, an $80 billion industry where buyers and sellers participate in alternating-offer bargaining when the auction price fails to reach a secret reserve price. Using 270,000 auction/bargaining sequences, this study nonparametrically estimates bounds on the distributions of buyer and seller valuations and then estimates where bargaining outcomes lie relative to the efficient frontier. Findings indicate that the d...
December 2013Bid Takers or Market Makers? The Effect of Auctioneers on Auction Outcomes
with Nicola Lacetera, Devin G. Pope, Justin R. Sydnor: w19731
A large body of research has explored the importance of auction design and information structure for auction outcomes. Much less work has considered the importance of the auction process. For example, in many auctions, auctioneers are present and can impact the process of the auction by varying starting prices, level of price adjustments, the speed of the auction, the way they interact with auction participants, or their characteristic chant that is intended to excite buyers. We explore the importance of auction process by testing whether auctioneers can have a systematic difference on auction outcomes. We analyze more than 850,000 wholesale used car auctions and find large and significant differences in outcomes (probability of sale, price, and auction speed) across auctioneers. The perfo...

Contact and additional information for this authorAll NBER papers and publicationsNBER Working Papers only

 
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