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First-price auctions with resale and with outcomes robust to bid disclosure

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  • Bernard Lebrun

Abstract

Although there exists a pure separating equilibrium of the two-bidder first-price auction with resale when the bids are kept secret, the ratchet effect prevents the existence of such an equilibrium if the bidders are heterogeneous and the bids are fully disclosed. Nevertheless, we construct a behavioral equilibrium under full disclosure that is equivalent to the pure separating equilibrium under no disclosure. Thus, if the bidders follow this equilibrium, the choice of the disclosure regime does not affect the final allocation of the item nor the expected payoffs. Copyright (c) 2010, RAND.

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  • Bernard Lebrun, 2010. "First-price auctions with resale and with outcomes robust to bid disclosure," RAND Journal of Economics, RAND Corporation, vol. 41(1), pages 165-178.
  • Handle: RePEc:bla:randje:v:41:y:2010:i:1:p:165-178
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    Cited by:

    1. Hafalir Isa & Kurnaz Musab, "undated". "Discriminatory Auctions with Resale," GSIA Working Papers 2015-E12, Carnegie Mellon University, Tepper School of Business.
    2. Bergemann, Dirk & Wambach, Achim, 2015. "Sequential information disclosure in auctions," Journal of Economic Theory, Elsevier, pages 1074-1095.
    3. repec:eee:indorg:v:55:y:2017:i:c:p:58-90 is not listed on IDEAS
    4. Kaplan, Todd R. & Zamir, Shmuel, 2015. "Advances in Auctions," Handbook of Game Theory with Economic Applications, Elsevier.
    5. Charles Z. Zheng, 2014. "Existence of Monotone Equilibria in First-Price Auctions with Resale," University of Western Ontario, Economic Policy Research Institute Working Papers 20141, University of Western Ontario, Economic Policy Research Institute.
    6. Celik, Gorkem & Yilankaya, Okan, 2017. "Resale in second-price auctions with costly participation," International Journal of Industrial Organization, Elsevier, pages 148-174.
    7. Fan, Cuihong & Jun, Byoung Heon & Wolfstetter, Elmar G., 2016. "Optimal bid disclosure in patent license auctions under alternative modes of competition," International Journal of Industrial Organization, Elsevier, pages 1-32.
    8. Lebrun, Bernard, 2012. "Optimality and the English and second-price auctions with resale," Games and Economic Behavior, Elsevier, vol. 75(2), pages 731-751.
    9. Filiz-Ozbay, Emel & Lopez-Vargas, Kristian & Ozbay, Erkut Y., 2015. "Multi-object auctions with resale: Theory and experiment," Games and Economic Behavior, Elsevier, vol. 89(C), pages 1-16.

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