caa a22 4500 606223320 CHVBK 20210128101137.0 cr unu---uuuuu 210128e20150601xx s 000 0 eng 10.1007/s11129-015-9157-y doi (NATIONALLICENCE)springer-10.1007/s11129-015-9157-y Zeithammer Robert Anderson School of Management, University of California, Los Angeles, CA, USA aut Optimal selling strategies when buyers name their own prices [Elektronische Daten] [Robert Zeithammer] This paper models a name-your-own-price (NYOP) retailer who allows buyers to initiate their retail interactions by describing a product and submitting a binding bid for it. The buyers have an outside option to buy the same good for a commonly known posted price that also acts as an informative upper bound on the cost the NYOP retailer faces. We conceptualize a selling strategy of such an NYOP retailer to be the probability that a buyer's bid gets accepted. The selling strategy is a function of only the bid level; it does not depend on the particular realization of the retailer's procurement cost. Using mechanism-design techniques, we characterize the optimal selling strategy and the equilibrium bidding function that best responds to it. We show that the optimal strategy implements the first-best ex-post optimal mechanism: for every cost realization, the retailer can make as much profit as he would if he could learn his cost first and use the optimal mechanism contingent on it. The complexity involved in credibly communicating an entire bid-acceptance function to buyers can make the first-best strategy impractical in some real-world markets, so we also analyze several simpler NYOP strategies: setting a minimum bid, charging a participation fee, and accepting all bids above cost. We find that under many scenarios, the minimum-bid strategy dominates the other simpler strategies and achieves a majority of the maximal profit improvement available from the first best strategy. However, NYOP retailers in thin markets can do better by charging participation fees than by setting minimum bids. Springer Science+Business Media New York, 2015 Name-your-own-price selling nationallicence Pricing nationallicence Mechanism design nationallicence Ex-post implementation nationallicence Bidding nationallicence Two-part tariff nationallicence Minimum bid nationallicence Reserve price nationallicence Auction nationallicence Revenue equivalence nationallicence Quantitative Marketing and Economics Springer US; http://www.springer-ny.com 13/2(2015-06-01), 135-171 1570-7156 13:2<135 2015 13 11129 https://doi.org/10.1007/s11129-015-9157-y text/html Onlinezugriff via DOI BK010053 XK010053 XK010000 Metadata rights reserved Springer special CC-BY-NC licence nationallicence 1 research-article jats NATIONALLICENCE NATIONALLICENCE NL-springer NATIONALLICENCE 856 40 https://doi.org/10.1007/s11129-015-9157-y text/html Onlinezugriff via DOI NATIONALLICENCE 100 1- Zeithammer Robert Anderson School of Management, University of California, Los Angeles, CA, USA aut NATIONALLICENCE 773 0- Quantitative Marketing and Economics Springer US; http://www.springer-ny.com 13/2(2015-06-01), 135-171 1570-7156 13:2<135 2015 13 11129