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Asymmetric auctions with resale: An experimental study

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  • Georganas, Sotiris
  • Kagel, John

Abstract

We study auctions with resale based on Hafalir and Krishna's (2008) [6] model. As predicted, weak bidders bid more with resale than without, so that average auction prices tend to increase. When the equilibrium calls for weak types to bid higher than their values with resale they do, but not nearly as much as the theory predicts. In other treatments outcomes are much closer to the risk neutral Nash model's predictions. Bid distributions for weak and strong types are more similar with resale than without, in line with the theory.

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  • Georganas, Sotiris & Kagel, John, 2011. "Asymmetric auctions with resale: An experimental study," Journal of Economic Theory, Elsevier, vol. 146(1), pages 359-371, January.
    • Handle: RePEc:eee:jetheo:v:146:y:2011:i:1:p:359-371
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    References listed on IDEAS

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    1. Haile, Philip A., 2000. "Partial Pooling at the Reserve Price in Auctions with Resale Opportunities," Games and Economic Behavior, Elsevier, vol. 33(2), pages 231-248, November.
    2. Hafalir, Isa & Krishna, Vijay, 2009. "Revenue and efficiency effects of resale in first-price auctions," Journal of Mathematical Economics, Elsevier, vol. 45(9-10), pages 589-602, September.
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    6. Haile, Philip A., 2003. "Auctions with private uncertainty and resale opportunities," Journal of Economic Theory, Elsevier, vol. 108(1), pages 72-110, January.
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    8. 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.
    9. Guth, Werner & Ivanova-Stenzel, Radosveta & Wolfstetter, Elmar, 2005. "Bidding behavior in asymmetric auctions: An experimental study," European Economic Review, Elsevier, vol. 49(7), pages 1891-1913, October.
    10. Jacob K. Goeree & Theo Offerman, 2004. "Notes and Comments the Amsterdam Auction," Econometrica, Econometric Society, vol. 72(1), pages 281-294, January.
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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. Saral, Krista Jabs, 2012. "Speculation and demand reduction in English clock auctions with resale," Journal of Economic Behavior & Organization, Elsevier, vol. 84(1), pages 416-431.
    3. Garratt, Rodney & Georganas, Sotiris, 2021. "Auctions with speculators: An experimental study," Games and Economic Behavior, Elsevier, vol. 128(C), pages 256-270.
    4. Miguel A. Fonseca & Francesco Giovannoni & Miltiadis Makris, 2020. "Auctions with external incentives: experimental evidence," International Journal of Game Theory, Springer;Game Theory Society, vol. 49(4), pages 1003-1043, December.
    5. Marco Pagnozzi & Krista J. Saral, 2019. "Entry by successful speculators in auctions with resale," Experimental Economics, Springer;Economic Science Association, vol. 22(2), pages 477-505, June.
    6. 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.
    7. Shraman Banerjee & Swagata Bhattacharjee, 2023. "Virtue of Simplicity in Asymmetric Auctions," Working Papers 2023-01, Shiv Nadar University, Department of Economics.
    8. Lange, Andreas & List, John A. & Price, Michael K., 2011. "Auctions with resale when private values are uncertain: Evidence from the lab and field," International Journal of Industrial Organization, Elsevier, vol. 29(1), pages 54-64, January.
    9. Pagnozzi, Marco & Saral, Krista J., 2019. "Efficiency in auctions with (failed) resale," Journal of Economic Behavior & Organization, Elsevier, vol. 159(C), pages 254-273.
    10. 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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    Keywords

    Auctions Resale Experiment;

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