Resale and bundling in auctions

Marco Pagnozzi

International Journal of Industrial Organization, 2009, vol. 27, issue 6, 667-678

Abstract: The possibility of resale increases bidders' incentives to jointly reduce demand in multi-object auctions, because resale increases low-value bidders' willingness to pay and reduces high-value bidders' willingness to pay. Therefore, resale may reduce the seller's revenue. In a simple model with complete information, however, allowing resale and bundling the objects on sale are "complement strategies" for the seller (under reasonable conditions)--by bundling and allowing resale the seller earns a higher revenue than by selling the objects separately and/or forbidding resale. We also show why allowing resale may reduce efficiency.

Keywords: Multi-object; auctions; Resale; Bundling; Demand; reduction (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (14)

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Related works:
Working Paper: Resale and Bundling in Auctions (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:27:y:2009:i:6:p:667-678

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