Speculation in Second-Price Auctions with Resale

Rod Garratt () and Thomas Troger ()

Game Theory and Information from EconWPA

Abstract: This paper contributes to the literature on second-price auctions with resale. We add speculators---bidders with value zero---to the standard symmetric independent private values environment. There always exists a continuum of inefficient equilibria that are profitable for a speculator. With no reserve price in the initial auction, speculation can enhance the initial seller's expected revenue. On the other hand, speculation can harm the initial seller even if she chooses an optimal reserve price. Our results are valid for English auctions as well.

Keywords: speculation; second-price auction; resale (search for similar items in EconPapers)
JEL-codes: C7 D8 (search for similar items in EconPapers)
Date: 2003-05-30
Note: Type of Document -
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Related works:
Working Paper: Speculation in Second-Price Auctions with Resale (2003)
Working Paper: Speculation in Second-Price Auctions with Resale (2003)
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpga:0305003

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