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

The Impact of Resale on Entry in Second Price Auctions

Contents:

Author Info

  • Che, XiaoGang

    ()
    (University of Alberta, Department of Economics)

  • Lee, Peter

    ()
    (University of Sydney)

  • Yang, Yibai

    ()
    (University of Nottingham Ningbo China)

Abstract

This paper investigates the effect of resale allowance on entry strategies in a second price auction with two bidders whose entries are sequential and costly. We first characterize the perfect Bayesian equilibrium in cutoff strategies. We then show that there exists a unique threshold such that if the reseller's bargaining power is greater (less) than the threshold, resale allowance causes the leading bidder (the following bidder) to have a higher (lower) incentive on entry; i.e., the cutoff of entry becomes lower (higher). We also discuss asymmetric bidders and the original seller's expected revenue.

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.economics.ualberta.ca/~/media/economics/FacultyAndStaff/WPs/WP2013-06-Che-Lee-Yang
File Function: Full text
Download Restriction: no

Bibliographic Info

Paper provided by University of Alberta, Department of Economics in its series Working Papers with number 2013-6.

as in new window
Length: 19 pages
Date of creation: 01 May 2013
Date of revision:
Handle: RePEc:ris:albaec:2013_006

Contact details of provider:
Postal: 8-14 HM Tory, Edmonton, Alberta, T6G 2H4
Phone: (780) 492-3406
Fax: (780) 492-3300
Web page: http://www.economics.ualberta.ca/
More information through EDIRC

Related research

Keywords: second price auctions; costly participation; sequential entry; resale;

Other versions of this item:

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. Bulow, Jeremy I. & Klemperer, Paul, 2009. "Why Do Sellers (Usually) Prefer Auctions?," CEPR Discussion Papers, C.E.P.R. Discussion Papers 7411, C.E.P.R. Discussion Papers.
  2. Charles Zhoucheng Zheng, 2002. "Optimal Auction with Resale," Econometrica, Econometric Society, Econometric Society, vol. 70(6), pages 2197-2224, November.
  3. Cheng, Harrison, 2011. "Auctions with resale and bargaining power," Journal of Mathematical Economics, Elsevier, vol. 47(3), pages 300-308.
  4. Tan, Guofu & Yilankaya, Okan, 2006. "Equilibria in second price auctions with participation costs," Journal of Economic Theory, Elsevier, Elsevier, vol. 130(1), pages 205-219, September.
  5. Tian, Guoqiang & Xiao, Mingjun, 2009. "Vickrey Auctions with Sequential and Costly Participation," MPRA Paper 41203, University Library of Munich, Germany.
  6. 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.
  7. Tymofiy Mylovanov & Thomas Tröger, 2009. "Optimal auction with resale—a characterization of the conditions," Economic Theory, Springer, Springer, vol. 40(3), pages 509-528, September.
  8. Haile, Philip A., 2000. "Partial Pooling at the Reserve Price in Auctions with Resale Opportunities," Games and Economic Behavior, Elsevier, Elsevier, vol. 33(2), pages 231-248, November.
  9. McAfee, R. Preston & McMillan, John, 1987. "Auctions with entry," Economics Letters, Elsevier, Elsevier, vol. 23(4), pages 343-347.
  10. Marco Pagnozzi, 2007. "Bidding to lose? Auctions with resale," RAND Journal of Economics, RAND Corporation, vol. 38(4), pages 1090-1112, December.
  11. Haile, Philip A., 2003. "Auctions with private uncertainty and resale opportunities," Journal of Economic Theory, Elsevier, Elsevier, vol. 108(1), pages 72-110, January.
  12. Lebrun, Bernard, 2012. "Optimality and the English and second-price auctions with resale," Games and Economic Behavior, Elsevier, Elsevier, vol. 75(2), pages 731-751.
  13. 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.
  14. Samuelson, William F., 1985. "Competitive bidding with entry costs," Economics Letters, Elsevier, Elsevier, vol. 17(1-2), pages 53-57.
  15. Rod Garratt & Thomas Troger, 2004. "Speculation in Standard Auctions with Resale," Microeconomics, EconWPA 0405005, EconWPA.
  16. Philip A. Haile, 2001. "Auctions with Resale Markets: An Application to U.S. Forest Service Timber Sales," American Economic Review, American Economic Association, American Economic Association, vol. 91(3), pages 399-427, June.
  17. Gupta, Madhurima & Lebrun, Bernard, 1999. "First price auctions with resale," Economics Letters, Elsevier, Elsevier, vol. 64(2), pages 181-185, August.
  18. Levin, Dan & Smith, James L, 1994. "Equilibrium in Auctions with Entry," American Economic Review, American Economic Association, American Economic Association, vol. 84(3), pages 585-99, June.
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. Todd R. Kaplan & Shmuel Zamir, 2014. "Advances in Auctions," Discussion Paper Series, The Center for the Study of Rationality, Hebrew University, Jerusalem dp662, The Center for the Study of Rationality, Hebrew University, Jerusalem.

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:ris:albaec:2013_006. 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: (Brenda Carrier).

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.