Erratum to “Optimal Reverse-Pricing Mechanisms” by Martin Spann, Robert Zeithammer, and Gerald Häubl

Abstract

In our paper about optimal reverse pricing mechanisms [Spann M, Zeithammer R, Häubl G (2010) Optimal reverse-pricing mechanisms. Marketing Sci. 29(6):1058–1070] (hereafter, ORPM), some of the mathematical derivations implicitly assume that the name-your-own-price seller interprets the outside-market posted price p differently than the buyers. This note shows that all of the qualitative results in ORPM continue to hold under the more natural assumption of common knowledge that p is the upper bound of wholesale cost. Interestingly, the proofs and algebraic expressions are often simpler than those in ORPM.