Price Dynamics, Mechanism Choice and Mechanism Design in Markets for Perishable Goods

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This award is funded under the American Recovery and Reinvestment Act of 2009 (Public Law 111-5).This award funds three empirical research projects examining markets for perishable goods. The products sold in these markets lose their value after a pre-specified date, and they can only be consumed on that date no matter when they were purchased. The goal is to understand the general economic forces that determine outcomes in these markets. In particular, the research is interested in comparing the strengths and weaknesses of auctions and fixed prices as ways of selling perishable goods.The research documents new phenomena in perishable goods markets. It also tests theoretical models of market processes in new ways. The models provide an empirical framework that can be used to evaluate price dynamics and the mechanism choice in other settings. Finally, the project develops, estimates, and tests new models of multi-unit auctions with observable product differentiation.Many of these research questions are also important for operations management research and practice. The resulting broader impact may improve business practice and inventory management.