Asymmetric Auctions with Resale
Authors: Hafalir, Isa; Krishna, Vijay
Source: The American Economic Review, Volume 98, Number 1, March 2008 , pp. 87-112(26)
Publisher: American Economic Association
Abstract:We study first- and second-price auctions with resale in a model with independent private values. With asymmetric bidders, the resulting inefficiencies create a motive for post-auction trade which, in our model, takes place via monopoly pricing—the winner makes a take-it-or-leave-it offer to the loser. We show (a) a first-price auction with resale has a unique monotonic equilibrium; and (b) with resale, the expected revenue from a first-price auction exceeds that from a second-price auction. The inclusion of resale possibilities thus permits a general revenue ranking of the two auctions that is not available when these are excluded.
Document Type: Research Article
Publication date: March 2008
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