Demand Reduction in Multi-Object Auctions with Resale: An Experimental Analysis

Marco Pagnozzi and Krista Saral

CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy

Abstract: We analyze the effects of different resale mechanisms on bidders’ strategies in multi-object uniform-price auctions with asymmetric bidders. Our experimental design consists of four treatments: one without resale and three resale treatments that vary the information available and the bargaining mechanism in the resale market. The presence of a resale market induces demand reduction by high-value bidders and speculation by low-value bidders, thus affecting the allocation of the objects on sale. The magnitude of these effects, however, depends on the form of the resale market. Features of the resale market that tend to increase its efficiency result in lower auction efficiency and seller’s revenue. We also show that, without resale, asymmetry among bidders reduces demand reduction.

Keywords: multi-object auctions; resale; asymmetric bidders; bargaining; economic experiments (search for similar items in EconPapers)
JEL-codes: C90 D44 (search for similar items in EconPapers)
Date: 2015-10-07
New Economics Papers: this item is included in nep-com and nep-exp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Published in The Economic Journal, 2017, 127(607), pp. 2702-2729

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Persistent link: https://EconPapers.repec.org/RePEc:sef:csefwp:416

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