Repeated Auctions with the Right of First Refusal
AbstractThis paper characterizes a set of Nash equilibria in a first-price sealed-bid repeated auction with the right of first refusal using two bidders and asymmetric information regarding the bidders’ value distributions. When contract value is constant from one auction to the next and winners’ values are publicized, agents retain the value of incumbency and bids are identical to one-shot auctions. When each agents’ contract values are random across auctions, agents choose to bid away the full expected value of incumbency, providing a measure of the value of information in this context.
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Bibliographic InfoPaper provided by School of Economic Sciences, Washington State University in its series Working Papers with number 2006-7.
Length: 23 pages
Date of creation: Jul 2006
Date of revision:
repeated auction; right of first refusal;
Other versions of this item:
- C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
- D44 - Microeconomics - - Market Structure and Pricing - - - Auctions
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
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- Grosskopf, Brit & Roth, Alvin E., 2009.
"If you are offered the Right of First Refusal, should you accept? An investigation of contract design,"
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- Brit Grosskopf & Alvin E. Roth, 2006. "If you are offered the Right of First Refusal, Should you accept? An Investigation of Contract Design," Levine's Bibliography 122247000000001017, UCLA Department of Economics.
- Skrzypacz, Andrzej & Hopenhayn, Hugo, 2004.
"Tacit collusion in repeated auctions,"
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- Hayley Chouinard, 2006. "Repeated Auctions with the Right of First Refusal and Asymmetric Information," Working Papers 2006-6, School of Economic Sciences, Washington State University.
- Osmundsen, Petter, 1996. "Repeated Auctions of Franchises for Nonrenewable Resources," Journal of Regulatory Economics, Springer, vol. 10(2), pages 183-89, September.
- Aoyagi, Masaki, 2003. "Bid rotation and collusion in repeated auctions," Journal of Economic Theory, Elsevier, vol. 112(1), pages 79-105, September.
- Hayley H. Chouinard, 2005. "Auctions with and without the Right of First Refusal and National Park Service Concession Contracts," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(4), pages 1083-1088.
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