Auctions with Resale Markets: An Application to U.S. Forest Service Timber Sales
AbstractWhen bidders anticipate an opportunity for resale trade, the value of winning an auction is determined in part by the option values of buying and selling in the secondary market. One implication is that a bidder's willingness to pay at an auction increases with the expected level of competition between resale buyers. Empirical evidence from auctions of timber contracts supports this prediction and rejects standard models that ignore resale. The estimated effect is smaller after policy changes expected to diminish the prevalence of resale. Additional evidence supports the predicted presence of a common value element introduced by the resale opportunity.
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Bibliographic InfoArticle provided by American Economic Association in its journal American Economic Review.
Volume (Year): 91 (2001)
Issue (Month): 3 (June)
Other versions of this item:
- Haile, P.A., 1997. "Auctions with Resale Markets: An Application to U.S. Forest Service Timber Sales," Working papers 9702, Wisconsin Madison - Social Systems.
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- Q23 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Forestry
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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