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Auctions with entry and resale

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  • Xu, Xiaoshu
  • Levin, Dan
  • Ye, Lixin

Abstract

We study how resale affects auctions with costly entry in a model where bidders possess two-dimensional private information signals: entry costs and valuations. We establish the existence of symmetric entry equilibrium and identify sufficient conditions under which the equilibrium is unique. Our analysis suggests that the opportunity of resale affects both entry and bidding, and, in particular, it induces motivation for speculative entry and resale hunting abstentions. Our numerical results suggest that while expected entry is higher when resale is allowed, the effects of resale on expected revenue and efficiency are both ambiguous.

Suggested Citation

  • Xu, Xiaoshu & Levin, Dan & Ye, Lixin, 2013. "Auctions with entry and resale," Games and Economic Behavior, Elsevier, vol. 79(C), pages 92-105.
  • Handle: RePEc:eee:gamebe:v:79:y:2013:i:c:p:92-105 DOI: 10.1016/j.geb.2013.01.006
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    References listed on IDEAS

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    Citations

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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. repec:eee:indorg:v:55:y:2017:i:c:p:58-90 is not listed on IDEAS
    3. Robert G. Hammond & Thayer Morrill, 2014. "Strategic Exclusion Of The Highest-Valued Bidders In Wholesale Automobile Auctions," Economic Inquiry, Western Economic Association International, vol. 52(3), pages 1219-1230, July.
    4. repec:eee:gamebe:v:105:y:2017:i:c:p:104-111 is not listed on IDEAS
    5. Todd R. Kaplan & Shmuel Zamir, 2014. "Advances in Auctions," Discussion Papers 1405, Exeter University, Department of Economics.
    6. Celik, Gorkem & Yilankaya, Okan, 2017. "Resale in second-price auctions with costly participation," International Journal of Industrial Organization, Elsevier, pages 148-174.
    7. Pagnozzi, Marco & Saral, Krista J., 2016. "Entry by Successful Speculators in Auctions with Resale," MPRA Paper 70022, University Library of Munich, Germany.
    8. Lorentziadis, Panos L., 2016. "Optimal bidding in auctions from a game theory perspective," European Journal of Operational Research, Elsevier, vol. 248(2), pages 347-371.
    9. Kaplan, Todd R. & Zamir, Shmuel, 2015. "Advances in Auctions," Handbook of Game Theory with Economic Applications, Elsevier.

    More about this item

    Keywords

    Auctions; Auctions with resale; Auctions with entry;

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General

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