Auctions with Options to Re-auction
We examine a dynamic model of English auctions with independent private values. There is a single object for sale and it is not possible for the seller, who has a value of zero for the object, to commit not to sell in the future if a sale is not accomplished today. The seller may be able to commit to a reserve price, or make a cheap-talk announcement of a reserve price and secretly bid for the object herself in order to re-auction it in a later round with a new set of bidders. Bidders are "short-lived" in the sense that at the end of each round all existing bidders vanish and new bidders start arriving. This framework allows us to obtain existing results for one shot-auctions as special cases. This framework also allows us to capture some of the features of thick internet auctions and to obtain some new insights on the role of commitment, on optimal length and on socially optimal reserve prices that are not apparent from a one-shot auction perspective.
|Date of creation:||Jul 2003|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: (713) 527-4875
Fax: (713) 285-5278
Web page: http://www.ruf.rice.edu/~econ/papers/index.html
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Vincent Daniel R., 1995. "Bidding Off the Wall: Why Reserve Prices May Be Kept Secret," Journal of Economic Theory, Elsevier, vol. 65(2), pages 575-584, April.
- Jones, C. & Menezes, F. & Vella, F., 1996.
"Auctions Price Anomalies: Evidence from Wool Auctions in Australia,"
303, Australian National University - Department of Economics.
- Chris Jones & Flavio Menezes & Francis Vella, 2004. "Auction Price Anomalies: Evidence from Wool Auctions in Australia," The Economic Record, The Economic Society of Australia, vol. 80(250), pages 271-288, 09.
- John G. Riley & William Samuelson, 1979.
UCLA Economics Working Papers
152, UCLA Department of Economics.
- Wang, Ruqu, 1993.
"Auctions versus Posted-Price Selling,"
American Economic Review,
American Economic Association, vol. 83(4), pages 838-51, September.
- Horstmann, I.J. & LaCasse, C., 1995.
"Secret Reserve Prices in a Bidding Model with a Re-Sale Option,"
9507e, University of Ottawa, Department of Economics.
- Horstmann, Ignatius J & LaCasse, Chantale, 1997. "Secret Reserve Prices in a Bidding Model with a Resale Option," American Economic Review, American Economic Association, vol. 87(4), pages 663-84, September.
- Lucking-Reiley, David, 2000. "Auctions on the Internet: What's Being Auctioned, and How?," Journal of Industrial Economics, Wiley Blackwell, vol. 48(3), pages 227-52, September.
- Indranil Chakraborty & Georgia Kosmopoulou, 2004. "Auctions with shill bidding," Economic Theory, Springer, vol. 24(2), pages 271-287, August.
- McAfee, R. Preston & Vincent, Daniel, 1997.
"Sequentially Optimal Auctions,"
Games and Economic Behavior,
Elsevier, vol. 18(2), pages 246-276, February.
- Milgrom, Paul R & Weber, Robert J, 1982.
"A Theory of Auctions and Competitive Bidding,"
Econometric Society, vol. 50(5), pages 1089-1122, September.
- Burguet, Roberto & Sakovics, Jozsef, 1996. "Reserve Prices without Commitment," Games and Economic Behavior, Elsevier, vol. 15(2), pages 149-164, August.
- Porter, Robert H, 1995.
"The Role of Information in U.S. Offshore Oil and Gas Lease Auctions,"
Econometric Society, vol. 63(1), pages 1-27, January.
- Robert H. Porter, 1992. "The Role of Information in U.S. Offshore Oil and Gas Lease Auctions," NBER Working Papers 4185, National Bureau of Economic Research, Inc.
- Robert H. Porter, 1992. "The Role of Information in U.S. Offshore Oil and Gas Lease Auctions," Discussion Papers 1008, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
- Graham, Daniel A. & Marshall, Robert C. & Richard, Jean-Francois, 1990. "Phantom bidding against heterogeneous bidders," Economics Letters, Elsevier, vol. 32(1), pages 13-17, January.
- Levin, Dan & Smith, James L, 1994. "Equilibrium in Auctions with Entry," American Economic Review, American Economic Association, vol. 84(3), pages 585-99, June.
- Diamond, Peter A., 1971. "A model of price adjustment," Journal of Economic Theory, Elsevier, vol. 3(2), pages 156-168, June.
- Harstad, Ronald M. & Kagel, John H. & Levin, Dan, 1990. "Equilibrium bid functions for auctions with an uncertain number of bidders," Economics Letters, Elsevier, vol. 33(1), pages 35-40, May.
- Holt, Charles A, Jr, 1979. "Uncertainty and the Bidding for Incentive Contracts," American Economic Review, American Economic Association, vol. 69(4), pages 697-705, September.
- Alvin E. Roth & Axel Ockenfels, 2000. "Last Minute Bidding and the Rules for Ending Second-Price Auctions: Theory and Evidence from a Natural Experiment on the Internet," NBER Working Papers 7729, National Bureau of Economic Research, Inc.
- McAfee, R. Preston & McMillan, John, 1987. "Auctions with a stochastic number of bidders," Journal of Economic Theory, Elsevier, vol. 43(1), pages 1-19, October.
- Haile, Philip A., 2003. "Auctions with private uncertainty and resale opportunities," Journal of Economic Theory, Elsevier, vol. 108(1), pages 72-110, January.
When requesting a correction, please mention this item's handle: RePEc:ecl:riceco:2003-15. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.