News: Seminari

Seminario di Jozsef Sakovics

ore 12.30 Aula della Scuola di Dottorato, Palazzo Cà Borin, Via del Santo 22

03.10.2017

Monopsony pricing with bilateral commitment

Seminario di Jozsef SakovicsUniversity of Edinburgh.

We analyze a model of personalized pricing by a monopsonist. We first show that this is the constrained optimal mechanism when interaction is decentralized: the terms of trade with one supplier are independent of those with any other one. When the distribution of costs is "nice", the buyer chooses to make the same offer to all suppliers, leading to a posted price. This result holds even in the presence of supplier market power and aggregate uncertainty about the quantity bought given a vector of prices. In the limit as the seller capacities tend to zero we obtain the classical monopsony price.