The Economics of Contingent Re-auctions
Sandro Brusco,
Giuseppe Lopomo and
Leslie Marx
American Economic Journal: Microeconomics, 2011, vol. 3, issue 2, 165-93
Abstract:
We consider an auction environment where an object can be sold with usage restrictions that generate benefits to the seller but decrease buyers' valuations. In this environment, sellers such as the FCC have used "contingent re-auctions," offering the restricted object with a reserve price, but re-auctioning it without restrictions if the reserve is not met. We show that contingent re-auctions are generally neither efficient nor optimal for the seller. We propose an alternative "exclusive-buyer mechanism" that can implement the efficient outcome in dominant strategies. In certain environments, parameters can be chosen so the seller's surplus is maximized across all selling procedures. (JEL D44, D82, H82)
JEL-codes: D44 D82 H82 (search for similar items in EconPapers)
Date: 2011
Note: DOI: 10.1257/mic.3.2.165
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)
Downloads: (external link)
http://www.aeaweb.org/articles.php?doi=10.1257/mic.3.2.165 (application/pdf)
http://www.aeaweb.org/aej/mic/app/2010-0040_app.pdf (application/pdf)
Access to full text is restricted to AEA members and institutional subscribers.
Related works:
Working Paper: The Economics of Contingent Re-Auctions (2008) 
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:aejmic:v:3:y:2011:i:2:p:165-93
Ordering information: This journal article can be ordered from
https://www.aeaweb.org/journals/subscriptions
Access Statistics for this article
American Economic Journal: Microeconomics is currently edited by Johannes Hörner
More articles in American Economic Journal: Microeconomics from American Economic Association Contact information at EDIRC.
Bibliographic data for series maintained by Michael P. Albert ().