Advanced Search
MyIDEAS: Login to save this paper or follow this series

Resale in Auctions with Financial Constraints

Contents:

Author Info

  • De Frutos, María Ángeles
  • Espinosa Alejos, María Paz

Abstract

This paper analyzes auctions where bidders face nancial constraints that may force them to resell part of the property of the good (or subcontract part of a project) at a resale market. First we show that the ine¢ cient speculative equilibria of second- price auctions (Garratt and Tröger, 2006) generalizes to situations with partial resale where only the high value bidder is nancially constrained. However, when all players face nancial constraints the ine¢ cient speculative equilibria disappear. Therefore, for auctioning big facilities or contracts where all bidders are nancially constrained and there is a resale market, the second price auction remains a simple and appropriate mechanism to achieve an e¢ cient allocation.

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: https://addi.ehu.es/bitstream/10810/8758/1/wp2012-03.pdf
Download Restriction: no

Bibliographic Info

Paper provided by University of the Basque Country - Department of Foundations of Economic Analysis II in its series DFAEII Working Papers with number 2012-03.

as in new window
Length:
Date of creation: 2012
Date of revision:
Handle: RePEc:ehu:dfaeii:8758

Contact details of provider:
Postal: Avenida Lehendakari Aguirre, 83, 48015 Bilbao
Phone: 34-946013774
Fax: 34-946017123
Web page: http://www.dfaeii.ehu.es
More information through EDIRC

Order Information:
Postal: Dpto. de Fundamentos del Análisis Económico II, = Facultad de CC. Económicas y Empresariales, Universidad del País Vasco, Avda. Lehendakari Aguirre 83, 48015 Bilbao, Spain
Email:

Related research

Keywords: auctions; resale; financial constraints; subcontracting;

Find related papers by JEL classification:

This paper has been announced in the following NEP Reports:

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. Rodney J. Garratt & Thomas Trˆger & Charles Z. Zheng, 2009. "Collusion via Resale," Econometrica, Econometric Society, Econometric Society, vol. 77(4), pages 1095-1136, 07.
  2. Morton I. Kamien & Lode Li & Dov Samet, 1989. "Bertrand Competition with Subcontracting," RAND Journal of Economics, The RAND Corporation, vol. 20(4), pages 553-567, Winter.
  3. 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.
  4. Marco Pagnozzi, 2007. "Bidding to lose? Auctions with resale," RAND Journal of Economics, RAND Corporation, RAND Corporation, vol. 38(4), pages 1090-1112, December.
  5. Chen, Yongmin & Ishikawa, Jota & Yu, Zhihao, 2001. "Trade Liberalization and Strategic Outsourcing," Discussion Papers, Graduate School of Economics, Hitotsubashi University 2001-04, Graduate School of Economics, Hitotsubashi University.
  6. Zheng, Charles Zhoucheng, 2001. "High Bids and Broke Winners," Staff General Research Papers, Iowa State University, Department of Economics 12665, Iowa State University, Department of Economics.
  7. Matthew Rhodes-Kropf & S. Viswanathan, 2005. "Financing Auction Bids," RAND Journal of Economics, The RAND Corporation, vol. 36(4), pages 789-815, Winter.
Full references (including those not matched with items on IDEAS)

Citations

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:ehu:dfaeii:8758. 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: (Alcira Macías Redondo).

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.