Repeated Auctions with the Right of First Refusal
This paper characterizes a set of Nash equilibria in a first-price sealed-bid repeated auction with the right of first refusal using two bidders and asymmetric information regarding the bidders' value distributions. When contract value is constant from one auction to the next and winners' values are publicized, agents retain the value of incumbency and bids are identical to one-shot auctions. When each agent's contract values are random across auctions, agents choose to bid away the full expected value of incumbency, providing a measure of the value of information in this context.
|Date of creation:||Aug 2006|
|Date of revision:||Jul 2007|
|Publication status:||published, BE Journal of Theoretical Economics|
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- Elmar Wolfstetter & Michael Landsberger & Jakob Rubinstei & Shmuel Zamir, 1997. "First-Price Auctions when the Ranking of Valuations," Microeconomics 9701004, EconWPA.
- Hayley H. Chouinard, 2005. "Auctions with and without the Right of First Refusal and National Park Service Concession Contracts," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 87(4), pages 1083-1088.
- Hopenhayn, Hugo A. & Skrzypacz, Andrzej, 2001.
"Tacit Collusion in Repeated Auctions,"
1698r2, Stanford University, Graduate School of Business.
- Grosskopf, Brit & Roth, Alvin E., 2009.
"If you are offered the Right of First Refusal, should you accept? An investigation of contract design,"
Games and Economic Behavior,
Elsevier, vol. 65(1), pages 176-204, January.
- Brit Grosskopf & Alvin E. Roth, 2006. "If you are offered the Right of First Refusal, Should you accept? An Investigation of Contract Design," Levine's Bibliography 122247000000001017, UCLA Department of Economics.
- Grosskopf, Brit & Roth, Alvin E., 2009. "If You are Offered the Right of First Refusal, Should You Accept? An Investigation of Contract Design," Scholarly Articles 4261988, Harvard University Department of Economics.
- Natalia Fabra, 2003. "Tacit Collusion in Repeated Auctions: Uniform Versus Discriminatory," Journal of Industrial Economics, Wiley Blackwell, vol. 51(3), pages 271-293, 09.
- Osmundsen, Petter, 1996. "Repeated Auctions of Franchises for Nonrenewable Resources," Journal of Regulatory Economics, Springer, vol. 10(2), pages 183-89, September.
- Hayley Chouinard, 2006. "Repeated Auctions with the Right of First Refusal and Asymmetric Information," Working Papers 2006-6, School of Economic Sciences, Washington State University.
- Owen R. Phillips & Dale J. Menkhaus & Kalyn T. Coatney, 2003. "Collusive Practices in Repeated English Auctions: Experimental Evidence on Bidding Rings," American Economic Review, American Economic Association, vol. 93(3), pages 965-979, June.
- Aoyagi, Masaki, 2003. "Bid rotation and collusion in repeated auctions," Journal of Economic Theory, Elsevier, vol. 112(1), pages 79-105, September.
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