Advanced Search
MyIDEAS: Login to save this article or follow this journal

Revenue and efficiency effects of resale in first-price auctions

Contents:

Author Info

  • Hafalir, Isa
  • Krishna, Vijay

Abstract

We study first-price auctions in a model with asymmetric, independent private values. Asymmetries lead to inefficient allocations, thereby creating a motive for resale after the auction is over. In our model, resale takes place via monopoly pricing--the winner of the auction makes a take-it-or-leave-it offer to the loser. Our goal is to compare equilibria of the first-price auction without resale (FPA) with those of the first-price auction with resale (FPAR). For the three major families of distributions for which equilibria of the FPA are available in closed form, we show that resale possibilities increase the revenue of the original seller. We also show by example that, somewhat paradoxically, resale may actually decrease efficiency.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.sciencedirect.com/science/article/B6VBY-4SG4HR0-1/2/7ae3b71a55c2a528c0a04aa2d422e6e0
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Elsevier in its journal Journal of Mathematical Economics.

Volume (Year): 45 (2009)
Issue (Month): 9-10 (September)
Pages: 589-602

as in new window
Handle: RePEc:eee:mateco:v:45:y:2009:i:9-10:p:589-602

Contact details of provider:
Web page: http://www.elsevier.com/locate/jmateco

Related research

Keywords: Auctions Asymmetries Resale;

References

References listed on IDEAS
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.:
as in new window
  1. Athey, S., 1997. "Sigle Crossing Properties and the Existence of Pure Strategy Equilibria in Games of Incomplete Information," Working papers, Massachusetts Institute of Technology (MIT), Department of Economics 97-11, Massachusetts Institute of Technology (MIT), Department of Economics.
  2. Eric Maskin & John Riley, 2003. "Uniqueness of Equilibrium in Sealed High-Bid Auctions," Economics Working Papers, Institute for Advanced Study, School of Social Science 0031, Institute for Advanced Study, School of Social Science.
  3. William Vickrey, 1961. "Counterspeculation, Auctions, And Competitive Sealed Tenders," Journal of Finance, American Finance Association, American Finance Association, vol. 16(1), pages 8-37, 03.
  4. Zheng, Charles Zhoucheng, 2002. "Optimal Auction with Resale," Staff General Research Papers, Iowa State University, Department of Economics 12664, Iowa State University, Department of Economics.
  5. Rod Garrat & Thomas Tröger, 2005. "Speculation in Standard Auctions with Resale," Bonn Econ Discussion Papers, University of Bonn, Germany bgse10_2005, University of Bonn, Germany.
  6. Marshall Robert C. & Meurer Michael J. & Richard Jean-Francois & Stromquist Walter, 1994. "Numerical Analysis of Asymmetric First Price Auctions," Games and Economic Behavior, Elsevier, Elsevier, vol. 7(2), pages 193-220, September.
  7. Plum, M, 1992. "Characterization and Computation of Nash-Equilibria for Auctions with Incomplete Information," International Journal of Game Theory, Springer, Springer, vol. 20(4), pages 393-418.
  8. repec:wop:humbsf:2000-72 is not listed on IDEAS
  9. Isa Hafalir & Vijay Krishna, 2008. "Asymmetric Auctions with Resale," American Economic Review, American Economic Association, American Economic Association, vol. 98(1), pages 87-112, March.
  10. Cheng, Harrison, 2006. "Ranking sealed high-bid and open asymmetric auctions," Journal of Mathematical Economics, Elsevier, Elsevier, vol. 42(4-5), pages 471-498, August.
  11. Maskin, Eric & Riley, John, 2000. "Asymmetric Auctions," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 67(3), pages 413-38, July.
  12. Rod Garratt & Thomas Troger, 2004. "Speculation in Standard Auctions with Resale," Microeconomics, EconWPA 0405005, EconWPA.
  13. Gupta, Madhurima & Lebrun, Bernard, 1999. "First price auctions with resale," Economics Letters, Elsevier, Elsevier, vol. 64(2), pages 181-185, August.
  14. Haile, Philip A., 2003. "Auctions with private uncertainty and resale opportunities," Journal of Economic Theory, Elsevier, Elsevier, vol. 108(1), pages 72-110, January.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Kaplan, Todd R & Zamir, Shmuel, 2014. "Advances in Auctions," MPRA Paper 54656, University Library of Munich, Germany.
  2. Virag, Gabor, 2009. "First-price auctions with resale: the case of many bidders," MPRA Paper 17094, University Library of Munich, Germany.
  3. Georganas, Sotiris & Kagel, John, 2011. "Asymmetric auctions with resale: An experimental study," Journal of Economic Theory, Elsevier, Elsevier, vol. 146(1), pages 359-371, January.
  4. Todd Kaplan & Shmuel Zamir, 2012. "Asymmetric first-price auctions with uniform distributions: analytic solutions to the general case," Economic Theory, Springer, Springer, vol. 50(2), pages 269-302, June.
  5. Xu, Xiaoshu & Levin, Dan & Ye, Lixin, 2013. "Auctions with entry and resale," Games and Economic Behavior, Elsevier, Elsevier, vol. 79(C), pages 92-105.
  6. Xiaoshu Xu & Dan Levin & Lixin Ye, 2012. "Auctions with synergy and resale," International Journal of Game Theory, Springer, Springer, vol. 41(2), pages 397-426, May.
  7. Cheng, Harrison, 2011. "Auctions with resale and bargaining power," Journal of Mathematical Economics, Elsevier, Elsevier, vol. 47(3), pages 300-308.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:eee:mateco:v:45:y:2009:i:9-10:p:589-602. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.