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First-Price, Second-Price, and English Auctions with Resale

  • Bernard Lebrun

    ()

    (York University, Toronto)

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    In the independent-private-value model, we allow resale among bidders following a first-price sealed-bid, second-price sealed-bid, or English auction with two bidders. We consider two regimes with regard to the disclosure of the sealed bids: full disclosure and no disclosure. Either the auction winner or the auction loser chooses the resale mechanism. Thanks to three key properties our model shares with the common-value model, we obtain explicit formulas for the equilibria. We circumvent the “ratchet effect,” by “randomizing” every pure equilibrium under no disclosure into an equivalent behavioral equilibrium under full disclosure. We compare the auctioneer’s revenues across auctions and bargaining procedures. We present some nbidder extensions.

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    File URL: http://dept.econ.yorku.ca/research/workingPapers/working_papers/2008/FPSPEAR-wp-lebrun.pdf
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    Paper provided by York University, Department of Economics in its series Working Papers with number 2008_06.

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    Length: 106 pages
    Date of creation: Dec 2008
    Date of revision:
    Handle: RePEc:yca:wpaper:2008_06
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    26. Subir Bose & George Deltas, 2007. "Exclusive Versus Non-exclusive Dealing in Auctions with Resale," Economic Theory, Springer, vol. 31(1), pages 1-17, April.
    27. Gupta, Madhurima & Lebrun, Bernard, 1999. "First price auctions with resale," Economics Letters, Elsevier, vol. 64(2), pages 181-185, August.
    28. Douglas K. Reece, 1978. "Competitive Bidding for Offshore Petroleum Leases," Bell Journal of Economics, The RAND Corporation, vol. 9(2), pages 369-384, Autumn.
    29. Bikhchandani, Sushil & Riley, John G., 1991. "Equilibria in open common value auctions," Journal of Economic Theory, Elsevier, vol. 53(1), pages 101-130, February.
    30. Lebrun, Bernard, 1999. "First Price Auctions in the Asymmetric N Bidder Case," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(1), pages 125-42, February.
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