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.
Original language | English (US) |
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Pages (from-to) | 87-112 |
Number of pages | 26 |
Journal | American Economic Review |
Volume | 98 |
Issue number | 1 |
DOIs | |
State | Published - Mar 2008 |
All Science Journal Classification (ASJC) codes
- Economics and Econometrics