Decision Sciences
4 years ago

Fixed price beats auction in selling shares, maximizing revenues.

RePEc: Research Papers in Economics
Selling Shares To Retail Investors: Auction Vs. Fixed Price
Veronika Grimm, Jürgen Bierbaum

Paper Summary

The article compares two ways of selling shares to many buyers: fixed price and auction. In the auction, honest bidding is best, but in the fixed price method, buyers may exaggerate their interest. Surprisingly, in some cases, the fixed price method makes more money than the auction.

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