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First-Price, Second-Price, and English Auctions with Resale

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Author Info
Bernard Lebrun () (York University, Toronto)
Abstract

In the independent-private-value model, we allow resale among bidders following a first-price sealed-bid, second-price sealed-bid, or English auction with two bidders. We consider two regimes with regard to the disclosure of the sealed bids: full disclosure and no disclosure. Either the auction winner or the auction loser chooses the resale mechanism. Thanks to three key properties our model shares with the common-value model, we obtain explicit formulas for the equilibria. We circumvent the “ratchet effect,” by “randomizing” every pure equilibrium under no disclosure into an equivalent behavioral equilibrium under full disclosure. We compare the auctioneer’s revenues across auctions and bargaining procedures. We present some nbidder extensions.

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Paper provided by York University, Department of Economics in its series Working Papers with number 2008_06.

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Length: 106 pages
Date of creation: Dec 2008
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Handle: RePEc:yca:wpaper:2008_06

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  2. Gale, Ian L & Hausch, Donald B & Stegeman, Mark, 2000. "Sequential Procurement with Subcontracting," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 41(4), pages 989-1020, November.
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  9. Giuseppe Lopomo, 1995. "Optimality and Robustness of the English Auction," Working Papers 95-03, New York University, Leonard N. Stern School of Business, Department of Economics.
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  10. Sergio O. Parreiras, 2006. "Affiliated Common Value Auctions with Differential Information: The Two Bidder Case," The B.E. Journal of Theoretical Economics, Berkeley Electronic Press, vol. 0(1). [Downloadable!]
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  12. repec:att:wimass:19199933 is not listed on IDEAS
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  14. Engelbrecht-Wiggans, Richard & Milgrom, Paul R. & Weber, Robert J., 1983. "Competitive bidding and proprietary information," Journal of Mathematical Economics, Elsevier, vol. 11(2), pages 161-169, April. [Downloadable!] (restricted)
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  20. Philip A. Haile, 2001. "Auctions with Resale Markets: An Application to U.S. Forest Service Timber Sales," American Economic Review, American Economic Association, vol. 91(3), pages 399-427, June. [Downloadable!] (restricted)
  21. Philippe Jehiel & Benny Moldovanu, 2000. "Auctions with Downstream Interaction Among Buyers," RAND Journal of Economics, The RAND Corporation, vol. 31(4), pages 768-791, Winter.
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  22. Subir Bose & George Deltas, 2007. "Exclusive Versus Non-exclusive Dealing in Auctions with Resale," Economic Theory, Springer, vol. 31(1), pages 1-17, April. [Downloadable!] (restricted)
  23. Wilson, Robert, 1977. "A Bidding Model of Perfect Competition," Review of Economic Studies, Blackwell Publishing, vol. 44(3), pages 511-18, October. [Downloadable!] (restricted)
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  25. Giacomo Calzolari & Alessandro Pavan, 2006. "Monopoly with Resale," RAND Journal of Economics, The RAND Corporation, vol. 37(2), pages 362-375, Summer.
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    • Giacomo Calzolari & Alessandro Pavan, 2004. "Monopoly with Resale," Discussion Papers 1393, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
    • Giacomo Calzolari & Alessandro Pavan, 2005. "Monopoly with Resale," Discussion Papers 1405, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
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  27. Paul Milgrom & Robert J. Weber, 1981. "The Value of Information in a Sealed-Bid Auction," Discussion Papers 462, Northwestern University, Center for Mathematical Studies in Economics and Management Science. [Downloadable!]
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  28. Milgrom, Paul R & Weber, Robert J, 1982. "A Theory of Auctions and Competitive Bidding," Econometrica, Econometric Society, vol. 50(5), pages 1089-1122, September. [Downloadable!] (restricted)
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  29. Lebrun, Bernard, 1997. "First Price Auctions in the Asymmetric N Bidder Case," Cahiers de recherche 9715, Université Laval - Département d'économique.
  30. Bikhchandani, Sushil & Riley, John G., 1991. "Equilibria in open common value auctions," Journal of Economic Theory, Elsevier, vol. 53(1), pages 101-130, February. [Downloadable!] (restricted)
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