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Resale and bundling in auctions

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  • Pagnozzi, Marco

Abstract

The possibility of resale increases bidders' incentives to jointly reduce demand in multi-object auctions, because resale increases low-value bidders' willingness to pay and reduces high-value bidders' willingness to pay. Therefore, resale may reduce the seller's revenue. In a simple model with complete information, however, allowing resale and bundling the objects on sale are "complement strategies" for the seller (under reasonable conditions)--by bundling and allowing resale the seller earns a higher revenue than by selling the objects separately and/or forbidding resale. We also show why allowing resale may reduce efficiency.

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  • Pagnozzi, Marco, 2009. "Resale and bundling in auctions," International Journal of Industrial Organization, Elsevier, vol. 27(6), pages 667-678, November.
  • Handle: RePEc:eee:indorg:v:27:y:2009:i:6:p:667-678
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    Cited by:

    1. Marco Pagnozzi & Krista Jabs Saral, 2013. "Multi-Object Auctions with Resale: An Experimental Analysis," CSEF Working Papers 328, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    2. Todd R. Kaplan & Shmuel Zamir, 2014. "Advances in Auctions," Discussion Papers 1405, University of Exeter, Department of Economics.
    3. Marco Pagnozzi, 2011. "Bids as a Vehicle of (Mis)Information: Collusion in English Auctions with Affiliated Values," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 20(4), pages 1171-1196, December.
    4. Marco Pagnozzi & Krista J. Saral, 2015. "Demand Reduction in Multi-Object Auctions with Resale: An Experimental Analysis," CSEF Working Papers 416, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    5. Pagnozzi, Marco & Saral, Krista J., 2019. "Efficiency in auctions with (failed) resale," Journal of Economic Behavior & Organization, Elsevier, vol. 159(C), pages 254-273.
    6. Cumpston, Anne & Khezr, Peyman, 2020. "Multi-Unit Auctions: A Survey of Theoretical Literature," MPRA Paper 101336, University Library of Munich, Germany.
    7. 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.
    8. Marco Pagnozzi, 2010. "Are Speculators Unwelcome in Multi-object Auctions?," American Economic Journal: Microeconomics, American Economic Association, vol. 2(2), pages 97-131, May.
    9. Kaplan, Todd R. & Zamir, Shmuel, 2015. "Advances in Auctions," Handbook of Game Theory with Economic Applications,, Elsevier.

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    More about this item

    Keywords

    Multi-object auctions Resale Bundling Demand reduction;

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions

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