Unilateral and Exclusionary/Strategic Effects of Common Agency: Price Impacts in a Repeated Common Value English Auction
No hay miniatura disponible
Fecha
Título de la revista
ISSN de la revista
Título del volumen
Editor
Resumen
Descripción
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.