Chow, YuenLeng; Hafalir, Isa; Yavas, Abdullah - Carnegie Mellon University, Tepper School of Business
We offer a theoretical and empirical comparison of auctions and negotiated sales. We first build a simple model to show that auctions generate a higher relative price than negotiated sales when demand for the asset is strong, when the asset is more homogeneous, and when the asset attracts buyers...