Existence of Monotone Equilibria in First-Price Auctions with Resale

Charles Zheng

No 20141, University of Western Ontario, Economic Policy Research Institute Working Papers from University of Western Ontario, Economic Policy Research Institute

Abstract: Existence of a monotone pure-strategy perfect Bayesian equilibrium is proved for a multistage game of first-price auctions with interbidder resale, with any finite number of ex ante different bidders. Endogenous gains at resale complicate the winner’s curse and upset previous fixed-point methods to prove existence of monotone equilibria. This paper restructures the fixed-point approach with respect to comparative statics of the resale mechanisms strategically chosen after the auction. Despite speculation possibilities and the discontinuity-inducing uniform tie-breaking rule, at our equilibrium any bid that stands a chance to win is strictly increasing in the bidder’s use value.

Keywords: none; available (search for similar items in EconPapers)
Date: 2014
New Economics Papers: this item is included in nep-com, nep-gth and nep-mic
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Citations: View citations in EconPapers (4)

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