https://macropaperwarehouse.com/authors/asher-wolinsky/Asher WolinskyHugo -- gohugo.ioen-ushttps://macropaperwarehouse.com/papers/auctions-with-frictions-recruitment-entry-and-limited-commitment/https://macropaperwarehouse.com/papers/auctions-with-frictions-recruitment-entry-and-limited-commitment/<p>This paper develops an auction model that jointly incorporates three frictions pervading informal price-formation processes: (1) costly recruitment by the seller, (2) costly participation by bidders, and (3) the seller&rsquo;s inability to commit to a recruitment level or reserve price. The authors argue these frictions are especially prevalent in markets for idiosyncratic assets such as mergers and acquisitions, real estate, and home repair contracting, where auction houses like Christie&rsquo;s and Sotheby&rsquo;s command fees of 20–30% of revenues precisely because they reduce the underlying inefficiencies.</p>