 Efficiency in Auctions with (Failed) ResaleMarco Pagnozzi and Krista Saral CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy Abstract: We analyze how the possibility of resale affects efficiency in multi-object uniform-price auctions with asymmetric bidders using a combination of theory and experiments. Our experimental design consists of four treatments that vary the (exogenous) probability that bidders participate in a post-auction resale market, which is implemented as an unstructured bargaining game between bidders. In all treatments, the possibility of resale increases efficiency after the auction, but it also induces demand reduction by high-value bidders during the auction, which reduces auction efficiency. In contrast to what is usually argued, resale does not necessarily increase final efficiency. When there is a low probability of a resale market, final efficiency is actually lower than in an auction without resale. We also analyze the quantitative and qualitative bargaining chat data to provide additional behavioral insights into the functioning of resale markets. Keywords: Efficiency; multi-object auctions; resale; asymmetric bidders; bargaining; economic experiments (search for similar items in EconPapers) Forthcoming in Journal of Economic Behavior & Organization Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:sef:csefwp:432 Access Statistics for this paper More papers in CSEF Working Papers from Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy Contact information at EDIRC. |
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