Social Science Job Candidate

We study a model in which multiple sellers with limited supply compete for private valuation buyers by each selecting auctions. As a result, sellers strategically choose both how prices form and how the good is rationed. We show that sellers engender inefficiency in this setting both because they withhold the good and because they misallocate the good (sell the good to low valuation buyers despite the presence of high valuation buyers). Qualitatively, this corresponds to sellers choosing mechanisms with a posted price element, despite being able to choose auctions. Our findings contrast with the findings of the literatures on monopolistic and competing sellers, which suggest that the only form of inefficiency that arises is from sellers choosing to withhold the good.