The relationship the firm has with its clients and suppliers largely determines the amount of value it is able to capture in the chain (Chatain and Zemsky, 2007; Porter, 1991). Generally, a distinction is made between powerand trust-based buyer-seller relations (Cannon and Jr, 1999) and their relative impact on value appropriation by the focal firm (Lado, Boyd, and Hanlon, 1997). Surprisingly, ...

We study how seller exit and continuing sellers’ behavior on eBay are affected by an improvement in market transparency. The improvement was achieved by reducing strategic bias in buyer ratings. It led to a significant increase in buyer satisfaction with seller performance, but not to an increase in seller exit. When sellers had the choice between exiting—a reduction in adverse selection—and im...

We introduce the concept of Market Equilibria related to game theory. In the market, there exists sellers which sell divisible goods and buyers who have a desire to purchase some set of goods. Each buyer places a value on each of the goods in his list that relates to the importance of purchasing that specific good. At market equilibrium, no party (seller or buyer) has incentive to deviate from ...

a r t i c l e i n f o a b s t r a c t JEL classification: C72 C79 D40 D43 D44 Keywords: Algorithmic mechanism design Worst case scenario equilibrium analysis Frugality Minimum cost spanning tree problem Price of imperfect competition A buyer procures a network to span a given set of nodes; each seller bids to supply certain edges, then the buyer purchases a minimal cost spanning tree. An effici...

Forecast sharing in a supply chain using linear price contracts often leads to inefficiencies as the buyer has an incentive to inflate demand forecasts to ensure sufficient supply. Recent research in supply chain contracting has focused on one-shot relationships, and has identified various contracts that align incentives in the supply chain and induce the buyer to reveal forecast information tr...

The standard monopoly pricing problem is re-considered when the buyer can disclose his type (e.g. age, income, experience) at some cost. In the optimal sales mechanism with costly disclosure, the seller posts a price list, including a “sticker price” available to any buyer and a schedule of discounts available to those who disclose certain types. Unambiguous welfare implications of such a prici...

The conflicting problems of growing mobile service demand and underutilization of dedicated spectrum has given rise to a paradigm where mobile network operators (MNOs) share their infrastructure among themselves in order to lower their operational costs, while at the same time increase the usage of their existing network resources. We model and analyze such an infrastructure sharing system cons...

This paper studies infinite-horizon bargaining between a seller and multiple buyers when externalities are present. We extend the analysis in Jehiel & Moldovanu (1995a) by allowing for both pure and mixed equilibria. A characterization of the stationary subgame perfect equilibria in generic games is presented. Equilibria with delay exist only for strong positive externalities. Since each buyer ...

This paper analyzes the e¤ects of buyer and seller risk aversion in …rst and secondprice auctions. The setting is the classic one of symmetric and independent private values, with ex ante homogeneous bidders. However, the seller is able to optimally set the reserve price. In both auctions the seller’s optimal reserve price is shown to decrease in his own risk aversion, and more so in the …rst-p...

This article explores the development of sales tax on e-business. It points out that the problem was rooted in the fact that the seller is required to collect and remit the tax to the buyer’s state government. If the seller and the buyer do not reside in the same state, the buyer’s state government has no jurisdiction over the seller, unless there is a “physical presence” of the seller in the b...