The Impact of Resale on Entry in Second Price Auctions

XiaoGang Che (), Peter Lee and Yibai Yang

No 2013-07, Working Papers from University of Sydney, School of Economics

Abstract: This paper investigates the effect of resale allowance on entry strategies in a second price auction with two bidders whose entries are sequential and costly. We first characterize the perfect Bayesian equilibrium in cutoff strategies. We then show that there exists a unique threshold such that if the reseller's bargaining power is greater (less) than the threshold, resale allowance causes the leading bidder (the following bidder) to have a higher (lower) incentive on entry; i.e., the cutoff of entry becomes lower (higher). We also discuss asymmetric bidders and the original seller's expected revenue.

Keywords: resale; sequential entry; costly participation; Second price auctions (search for similar items in EconPapers)
Date: 2013-04
New Economics Papers: this item is included in nep-com, nep-cta and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://econ-wpseries.com/2013/201307.pdf

Related works:
Journal Article: The impact of resale on entry in second price auctions (2013)
Working Paper: The Impact of Resale on Entry in Second Price Auctions (2013)
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:syd:wpaper:2123/9029

Access Statistics for this paper

More papers in Working Papers from University of Sydney, School of Economics Contact information at EDIRC.
Bibliographic data for series maintained by Vanessa Holcombe ().