Repeated Auctions with the Right of First Refusal

Hayley H. Chouinard and Jonathan K. Yoder
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Hayley H. Chouinard: Washington State University
Jonathan K. Yoder: Washington State University

The B.E. Journal of Theoretical Economics, 2007, vol. 7, issue 1

Abstract: This paper characterizes a set of Nash equilibria in a first-price sealed-bid repeated auction with the right of first refusal using two bidders and asymmetric information regarding the bidders' value distributions. When contract value is constant from one auction to the next and winners' values are publicized, agents retain the value of incumbency and bids are identical to one-shot auctions. When each agent's contract values are random across auctions, agents choose to bid away the full expected value of incumbency, providing a measure of the value of information in this context.

Keywords: repeated auctions; right of first refusal (search for similar items in EconPapers)
JEL-codes: C72 D44 D82 (search for similar items in EconPapers)
Date: 2007

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Persistent link: http://EconPapers.repec.org/RePEc:bpj:bejtec:v:7:y:2007:i:1:n:21

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