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Reservation Price Announcement in Sealed Bid Auctions: Comment
Economic Staff Paper Series
  • John R. Schroeter, Iowa State U
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In a 1993 paper in the Journal of Industrial Economics, Carey studies the problem of reservation price announcement in sealed bid procurement auctions. Assuming that the auctioneer/monopsonist has a self-supply option and is motivated by the desire to minimize the expected total cost of procurement, she investigates the auctioneer's decision to announce a reservation price and the level at which it should be set. Carey's analysis includes some errors, however. This comment proposes corrections. I begin by describing the auction setting.
Citation Information
John R. Schroeter. "Reservation Price Announcement in Sealed Bid Auctions: Comment" (1996)
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