Speculation in First-Price Auctions with Resale

Thomas Troger ()

Microeconomics from EconWPA

Abstract: We analyze first-price auctions with two asymmetric bidders, where the winner can offer the good for resale to the loser. One bidder has a private value for the good, the other bidder - the speculator - has zero value. We show that, independently of the resale market rules, the speculator's expected profit equals zero. Nevertheless, the opportunity for resale can create a role for an active speculator, destroy the efficiency of the auction, and increase the initial seller's expected revenue.

Keywords: first-price auction; speculation; resale (search for similar items in EconPapers)
JEL-codes: D44 D82 (search for similar items in EconPapers)
Date: 2003-08-04
Note: Type of Document -
View list of references View citations in EconPapers

Downloads: (external link)
http://129.3.20.41/eps/mic/papers/0308/0308001.pdf (application/pdf)

Related works:
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: http://EconPapers.repec.org/RePEc:wpa:wuwpmi:0308001

Access Statistics for this paper

More papers in Microeconomics from EconWPA
Series data maintained by EconWPA ().