Fu-Shiung Hsieh # Department of Computer Science and Information Engineering, Chaoyang University of Technology Taiwan, R.O.C. [email protected] Abstract—We formulate group buying problem as a combinatorial reverse auction problem with multiple buyers and multiple sellers. We propose the concept of proxy buyer to deal with this problem. The proxy buyer consolidates the demands from the buyers...

Credence goods markets suffer from inefficiencies caused by superior information of sellers about the surplus-maximising quality. While standard theory predicts that equal mark-up prices solve the credence goods problem if customers can verify the quality received, experimental evidence indicates the opposite. We identify a lack of robustness with respect to heterogeneity in social preferences ...

This paper is about a market for credence goods. With a credence good consumers are never sure about the extent of the good they actually need. Therefore, sellers act as experts determining the customers’ requirements. This information asymmetry between buyers and sellers obviously creates strong incentives for sellers to cheat on services. We analyze whether the market mechanism may induce non...

We study the effects of reputation and competition in a stylized market for experience goods. If interaction is anonymous, such markets perform poorly: sellers are not trustworthy, and buyers do not trust sellers. If sellers are identifiable and can, hence, build a reputation, efficiency quadruples but is still at only a third of the first best. Adding more information by granting buyers access...

Buyers always want to obtain goods at the lowest price. To do so, a buyer agent can have multiple concurrent negotiations with all the sellers. It is obvious that if the buyer obtains a good price from one of the sellers, the buyer should have more bargaining power in negotiating with other sellers. Then, other sellers should offer a lower price in order to make a deal. In this way, the concurr...

This paper considers a dynamic version of Akerlof’s (1970) lemons problem where buyers and sellers must engage in search to find a trading partner. We show that if goods are durable, the market itself may provide a natural sorting mechanism. In equilibrium, high-quality goods sell at a higher price than lowquality goods but also circulate longer. This accords with the common wisdom that sellers...

Advances in technology enable sellers to price discriminate based upon a customer’s previous purchase decision. E‐tailers can track items already in a shopping cart and item level RFID tags enable retailers to do the same in bricks and mortar stores. As retailers attempt to leverage the information made available from these technologies, it is important to understand how this new visibility imp...

Virtual markets are becoming more and more accepted by buyers and sellers. The success of eBay has prompted other companies to offer auction sites to lure buyers and sellers. The new companies usually offer lower rates to attract virtual sellers thereby multiplying the number of options for virtual buyers. This project presents an exploratory study of the final value available to sellers on two...

We study markets for a good whose safety (the seller’s type), cannot be costlessly observed by the buyer. Using a costly state verification model with inter-temporal correlation in types, we identify contractual arrangements that induce sellers to report unsafe products voluntarily. Perfect, but costly, verification (audits) and an exogenous publicly provided noisy signal (forecast) can provide...

We model a market where identical buyers direct their search to identical capacity-constrained sellers. Sellers cannot fully commit to the list price so strategic bargaining may determine the sale price. We study search and pricing behavior in symmetric equilibrium. Sale prices exhibit equilibrium dispersion as they respond naturally to local demand conditions. Uncoordinated search decisions le...