The Optimal Sequence of Prices and Auctions

The Optimal Sequence of Prices and Auctions

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Consider a monopolist seller who must use posted prices and reserve price auctions to sell one unit of an indivisible Charging good while buyers with independent private values arrive over time.Assume an auction costs more to the seller or to the buyers than a posted price.For a wide range of Dial Probe Thermometers auction cost, the optimal mechanism sequence is a sequence of prices followed by a sequence of auctions.The prices-then-auctions sequence is optimal under various extensions of the basic setting and resembles a buy-it-now selling format on eBay.