Can resale harm the original seller in a second-price auction?

Ethem Akyol

Economics Letters, 2021, vol. 203, issue C

Abstract: We consider second-price auctions with participation costs and investigate the revenue effects of a resale possibility. There are two potential bidders whose valuations are independently and identically distributed, and each bidder must incur a participation cost to bid in the auction. Due to these costs, there may be a resale opportunity in an otherwise efficient second-price auction. We show that when values are drawn from a uniform distribution, resale increases (decreases) entry of the lower-(higher-)cost bidder and decreases the original seller’s expected revenue.

Keywords: Second-price auctions; Resale; Participation cost; Expected revenue (search for similar items in EconPapers)
JEL-codes: C72 D44 D82 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0165176521001221
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:ecolet:v:203:y:2021:i:c:s0165176521001221

DOI: 10.1016/j.econlet.2021.109845

Access Statistics for this article

Economics Letters is currently edited by Economics Letters Editorial Office

More articles in Economics Letters from Elsevier
Bibliographic data for series maintained by Catherine Liu ().