Speculation in Second-Price Auctions with Resale
AbstractThis paper contributes to the literature on second-price auctions with resale. We add speculatorsÃ¢â¬âbidders with value zeroÃ¢â¬âto the standard symmetric independent private values environment. There always exists a continuum of inefficient equilibria that are profitable for a speculator. With no reserve price in the initial auction, specu-lation can enhance the initial sellerÃ¢â¬â¢s expected revenue. On the other hand, speculation can harm the initial seller even if she commits to an optimal reserve price. Our results are valid for English auctions as well.
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Bibliographic InfoPaper provided by David K. Levine in its series Levine's Working Paper Archive with number 506439000000000246.
Date of creation: 06 Feb 2003
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Other versions of this item:
- Rod Garratt & Thomas Troger, 2003. "Speculation in Second-Price Auctions with Resale," Game Theory and Information 0305003, EconWPA.
- Garratt, Rod & Troger, Thomas E, 2003. "Speculation in Second-Price Auctions with Resale," University of California at Santa Barbara, Economics Working Paper Series qt0bj7w3z6, Department of Economics, UC Santa Barbara.
- C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
- D8 - Microeconomics - - Information, Knowledge, and Uncertainty
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