Selling Assets: Are Sellers Better Off with Strong Buyers?

• 成果类型: Article
• 署名作者: Marquez, Robert; Singh, Rajdeep
• 署名单位: University of California System; University of California Davis; University of Minnesota System; University of Minnesota Twin Cities
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2023.4938
• 发表日期: 2024
• 页码: 5731-5752
• 关键词: ASSET SALES; Mergers and Acquisitions; asymmetric auctions; endogenous entry

摘要

When do sellers benefit from the presence of a strong buyer? In a second price auction with independent private values and entry costs for buyers, we allow for one buyer to be stochastically strong. We show that, when buyers make positive net profits, seller revenue is higher with a stronger buyer. In contrast, when competition is endogenous so that all buyers other than the strong buyer break even, seller revenue is always lower in the presence of a strong buyer. We also study seller actions such as providing buyer subsidies, setting reserve prices, securing multiple strong buyers, bundling assets, and optimally choosing the time of sale that might alleviate the fall in revenue.