Asymmetric Auctions with Resale

Isa Hafalir and Vijay Krishna

American Economic Review, 2008, vol. 98, issue 1, 87-112

Abstract: We study first- and second-price auctions with resale in a model with independent private values. With asymmetric bidders, the resulting ineffi ciencies create a motive for post-auction trade which, in our model, takes place via monopoly pricing—the winner makes a take-it-or-leave-it offer to the loser. We show (a) a first-price auction with resale has a unique monotonic equilibrium; and (b) with resale, the expected revenue from a first-price auction exceeds that from a second-price auction. The inclusion of resale possibilities thus permits a general revenue ranking of the two auctions that is not available when these are excluded. (JEL D44)

JEL-codes: D44 (search for similar items in EconPapers)
Date: 2008
Note: DOI: 10.1257/aer.98.1.87
References: Add references at CitEc
Citations: View citations in EconPapers (87)

Downloads: (external link)
http://www.aeaweb.org/articles.php?doi=10.1257/aer.98.1.87 (application/pdf)
http://www.aeaweb.org/aer/data/mar08/20060848_app.pdf (application/pdf)
Access to full text is restricted to AEA members and institutional subscribers.

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: https://EconPapers.repec.org/RePEc:aea:aecrev:v:98:y:2008:i:1:p:87-112

Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions

Access Statistics for this article

American Economic Review is currently edited by Esther Duflo

More articles in American Economic Review from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().