Auction theory and demography

TL;DR

This paper explores the interaction between sellers and buyers in various market scenarios, focusing on auction mechanisms, price discrimination, and how demographic factors influence bargaining and pricing strategies.

Contribution

It introduces a framework for analyzing auction dynamics considering demographic factors and different market structures, bridging economic theory with demographic influences.

Findings

Different auction types have distinct strategic features.

Demographic factors significantly influence bargaining power.

Market structure impacts pricing and auction outcomes.

Abstract

In economics, there are many ways to describe the interaction between a "seller" and a "buyer". The most common one, with which we interact almost every day, is selling for a fixed price. This option is perfect for selling a mass product, when we have a number of sellers and many buyers, and the price for the product varies depending on the conditions of the relationship between supply and demand. Another situation meets us already in markets, where a product can be either mass-produced or more unique, so this option is already closer to the object of our discussion.However, a one-on-one transaction is a much more unstable option, which is why it is also more difficult to model, since it is determined not so much by algorithms as by psychology and the difference in the bargaining ability of the two parties. An even closer example of an auction is price discrimination, when the price for the buyer is determined not only by supply and demand, but also by which group the buyer belongs to. But in this case, the product is not unique, and the final seller is the only one. Thus, we have identified the main auction criteria and their features of the "game".